
^ 



SECOND EDITION. 



REVISED. 



ENLARGED BY A CHAPTER ENTITLED: 



IS IT A CRIME TO OWN LAND? 



SOCIAL STRUGGLES. 



THE 



FUNDAMENTAL FACTS AND PRINCIPLES 

RELATIVE TO 

VALUES, PRICES, MONEY AND INTEREST; NATIONAL 
BANKS, FRANCHISES, 

THE SILVER QUESTION, 

SOCIALISM, CAPITAL AND LABOR, AND BUSINESS 
DERANGEMENT. 






BY 



JOHN PHILIP PHILLIPS. 



JliN 6 1888 

Tashh 



Whatever cannot bear investigation has no right to exist. 



NEW HAVEN, CONN.: 

Press of 

TUTTLE, MOREHOUSE & TAYLOR. 

1888. 






Entered According to Act of Congress, in the Year 1888, by 

JOHN PHILIP PHILLIPS, 
In the Office of the Librarian of Congress, at Washington. 



DEDICATION. 



TO THE 
MEN WHOSE STEADFAST VALOR HAS BEEN OUR NATIONAL RELIANCE 
IN TIMES OF WAR, AND WHOSE PATIENT INDUSTRY HAS EVER 
BEEN OUR SUPPORT; TO THOSE WHOSE BUSINESS AND 
DAILY BREAD ARE VITALLY AFFECTED BY FLUCTUA- 
TIONS m PRICES, WAGES and INTEREST; 

TO THE FARMERS, MECHANICS AND OTHER 

HONEST CREATORS OF WEALTH, THIS 

WORK IS RESPECTFULLY DEDICATED. 



PREFACE. 



A WIDELY Spread feeling of dissatisfaction with the pres- 
ent organization of society exists in every civilized nation. 
In some countries this discontent has assumed the form of 
secret organizations, one of the objects of which is to de- 
stroy the lives of kings and other representatives of the 
present social system. Europe, in time of peace, is covered 
with vast standing armies, armed with the most deadly 
weapons ingenuity has created, and trained to use those 
arms with special reference to the destruction of human life. 
The ostensible necessity of these armies is to protect one 
nation from the aggressions of others. But another and a 
deeper intent lies behind those armed millions. That par- 
tially veiled purpose is to prevent the masses of the popula- 
tion from rebelling against their own governments and 
destroying the existing social fabric. The net result of 
what is called the " highest civilization " is the virtual ad- 
mission that it is so hateful to the majority living under it, 
that huge armies of blood-hounds must be kept to compel 
submission. Many European thinkers believe that conti- 
nent drifting into a terrible revolution. 

Within a century this country has increased in population 
about sixteenfold. The increase in wealth, however, has 
been still greater. But it is a startling fact that every year 
the inequality between the amount of this vast wealth pos- 
sessed by each individual grows wider and wider. We for- 
merly supposed that our laws and institutions produced 
both political and social equality, and that the class distinc- 
tions and consequent bitter hatreds and jealousies of Euro- 
pean society could not here flourish. But to-day, the 
smothered discontent, which in some countries makes the 
dominant classes feel as if a volcano were seething beneath 



yi PREFACE. 

them, has obtained a firm lodgment in this country. Many 
of the conditions which exist in Europe are rapidly being 
developed here. 

Only fifteen years ago it was generally i)elieved that dis- 
satisfaction with our institutions was a transient feeling en- 
tertained by comparatively few persons. Resumption of 
specie payments was supposed an effectual panacea for such 
social disorder. At the enormous cost of much unemployed 
labor and industrial disorganization for several years, this 
remedy has been applied. But instead of being cured 
thereby, the inequality of wealth has grown greater, and the 
mutterings of discontent have grown louder and deeper. 
These mutterings are not yet formulated into a definite 
creed and purpose, but they have forced a recognition of 
their growth as a menace to public harmony and welfare in 
the future. Great numbers of people have one feeling in 
common. Without assigning a reason therefor, they in- 
stinctively feel that " something is wrong" in the present 
condition of affairs. They are not yet angry, but are an- 
noyed by a vague sense of being the victims of some injus- 
tice and wrong, the exact source and nature of which per- 
plexes them. At present this state of mind is chiefly 
expressed by trades unions and labor organizations of 
various kinds. To a considerable extent these bodies have 
imagined that those with whom they came in immediate 
contact were the chief cause of their troubles. Not under, 
standing the facts and principles involved in their situation, 
they have failed to see that laws and third parties, with 
whom they were not in direct contact, were the real source 
of difificulties and wrongs from which employers often suf- 
fered as much as themselves. Consequently, redress of 
grievances has been sought in warring against their em- 
ployers by organized strikes. These have inflicted great 
losses on society, and generally have left the workmen in 
worse condition than before. Such misdirected and often 
pitiful efforts can only be prevented by a wider diffusion of 
information in regard to the principles which govern prices 
and wages. 



PREFACE. Vii 

In a free country, dissent from laws and conditions 
inevitably assumes, sooner or later, the form of political 
action. People with common interests naturally have 
thoughts in common, and whenever these sentiments are 
shared by a considerable number of persons, and become 
crystallized into a common desire for a definite change of 
policy or law, political action will follow. Either a new 
party will arise, or one of those existing will be dominated 
by new ideas. Thus far, there has not been sufficient unity 
of purpose among the dissatisfied multitude to organize and 
muster a large number of voters. But organization and 
leaders under some name will appear whenever those now 
uneasy, but doubtful what they want, become converted by 
further thought and events into persons with a settled pur- 
pose. 

A revolt against permanently following the road we are 
now traveling will certainly occur. It is therefore impor- 
tant that every one should clearly understand that every 
evil, every wrong, and every error in our institutions, and 
every defect in their practical workings, can be cured by a 
peaceful revolution at the ballot-boxes. Such knowledge 
will prevent the folly of seeking redress of grievances by 
violent methods. 

The first element in the successful treatment of a sick 
man is a careful study of his disease. When what is at 
fault is known, the effect of different remedies on those 
wrong conditions must be considered before an appropriate 
prescription can be made. Both the facts and the princi- 
ples relative to the case must be weighed ; else the patient 
is in more danger from his doctor than from the malady. 

In like manner, when anything is at fault with the body 
politic, unless we first carefully study the matter, we may 
use remedies which will aggravate the trouble. Both the 
facts and the related principles must be considered before 
intelligent political action can be taken. 

Those who desire changes in our social policy are mostly 
farmers, mechanics, and laborers. Examination shows that 
this fact is the direct or indirect result of considerable leg- 



viii PREFACE. 

islation adverse to the interests of those classes. These 
persons are entitled to vote, and their numbers are so great 
that the control of law-making would at once be in their 
hands if they voted unitedly to protect their own interests. 
The chief obstacle to such a course has lain in the fact that 
the majority of the laboring classes have not studied true 
political economy. Consequently they have lacked clear 
convictions in regard to the effects of proposed legislation ; 
and, in this uncertain frame of mind, have been divided and 
misled by false and hypocritical cries into the support of 
measures intended for their own injury, and the benefit of 
persons, small in numbers, but very cunning and unscrupu- 
lous. 

That the present condition of things will remain undis- 
turbed is impossible. The laboring classes are slowly but 
steadily growing more conscious both of their political 
power and of the existence of defects and wrongs in our in- 
stitutions and laws. Consequently greater political combi- 
nations and efforts to improve their own condition may be 
expected from those persons in the future. How much of 
this political action will be judicious and well calculated to 
promote the best interests of the whole community, no one 
can foretell. But with absolute certainty we do know 
that whoever helps his countrymen to more easily obtain 
and fully understand a single fact or principle of political 
economy, thereby contributes his mite toward properly 
directing the future national thought and action. With the 
hope of making such a contribution, this book has been 
written. Its aim is to dissect and illustrate by examples 
and historical references some of the fundamental principles 
of political economy, and to state them so fully, and in such 
a plain and familiar manner, that any person of ordinary 
intelligence who has never before read a line on the subject 
can easily understand them. 

That the doctrines herein set forth should conform to the 
teachings of the majority of writers on such topics has been 
deemed of no consequence whatever. But it is important 
that correct principles should be elucidated. Therefore 



PREFACE. ix 

great pains and care have been taken to sift out common, 
but false, assumptions and theories, and to state nothing as 
truth which cannot be verified. 

It will doubtless seem to some readers that apparently 
plain things are dwelt on with unnecessary and tiresome 
detail. Such persons should remember that an understand- 
ing of political economy can only be obtained by observing 
the same conduct we follow when learning any other sub- 
ject or thing. A mechanic's apprentice who has fully 
learned to properly use half a dozen tools is well advanced 
in a knowledge of his trade. And in political economy, as 
in everything else, a knowledge of many complex things 
depends on first getting a clear comprehension of a few sim- 
ple things. In arithmetic no progress can be made until 
the pupil has learned to add, subtract, divide, and multiply. 
When the alphabet of a subject is thoroughly learned, the 
hardest work is done. If the reader will patiently consider 
the full meaning of the few elementary facts and principles 
herein discussed, and pass none of them carelessly by as 
unimportant, he will soon discover that the " difficult and 
abstruse questions of political economy" which are con- 
stantly talked of, are, in reality, easy and simple questions. 

It must be borne in mind, that whoever wishes to learn 
something about any subject whatsoever, must not begin his 
studies with the assumption that he is the incarnation of 
wisdom and already knows all about it. " Seest thou a 
man wise in his own conceit ? there is more hope of a fool 
than of him." 

Those who have a special desire to examine the silver 
question may think too much space is devoted to element- 
ary principles before reaching and discussing it. But it 
should be borne in mind that the topic of silver is only a 
fragment of the subject of money in general, and can only 
be properly understood in connection therewith. 

And the subject of money can only be clearly compre- 
hended by those who realize the great practical importance 
of such knowledge in the every day affairs of business and 
therefore are willing to slowly read and carefully consider 



X PREFACE. 

the facts and principles upon which the use of money 
rests. 

In an editorial note, the Century Magazine for Septem- 
ber, 1885, gives expression to the popular wonder that a 
country with such an industrious population and such 
vast and varied natural resources as the United States pos- 
sess, should not have uninterrupted prosperity, and then 
says : 

" What a strange spectacle this country presents at this very hour ! 
Money is plenty — fifty or sixty millions on deposit in the banks of New 
York City alone ! Food is plenty ; the granaries at the West are full of 
old wheat, and though the wheat crop of the present year does not 
promise well, the corn crop is likely to be larger then ever before ; there 
is no fear of scarcity. Manufactured goods are plenty ; the store-houses 
of the manufacturers and the shelves of the merchants are crowded with 
them. Labor is plenty ; live hundred thousand idle men are asking for 
work. Yet in the midst of this abundance a great industrial and com- 
mercial depression has overtaken us. At the time of writing this, work- 
men are selling their labor at the lowest prices, and many are unable to 
sell it at any price ; merchants and manufacturers find a dull market 
for their wares ; the railroads report losses instead of gains ; failures 
multiply. 

" The situation is not only pitiful, it is absurd. What is the explanation 
of it } Who is responsible for it .'' " 

True elementary principles furnish a complete answer to 
the foregoing questions. Either through ignorance, or self- 
ishness, the fundamental principles of political economy 
have generally been misapprehended and wrongly stated. 
Hence, many honest inquirers have been perplexed by prob- 
lems of comparatively easy solution. This difficulty has 
not arisen from defective reasoning, but by starting from 
false standpoints. 

Contentment among all classes of good citizens and steady 
industry and economy are the prime requisites of a perma- 
nent national prosperity. Nothing promotes that condition 
and fosters those virtues more than a public policy of fair 
dealing with all persons. Nothing is so safe and profitable 
as simple Justice. In a country governed by the majority 
of voters, the best safeguard of the rights and inter- 



PREFACE. xi 

ests of each individual is his dear knowledge of the effect of 
legislation upon them. Such knowledge is possible only to 
those who fully comprehend the "nature of Value, how it is 
created, increased and diminished, and the methods by 
which legislation may affect it. Singular as it may appear, 
the majority of economic works have been written by per- 
sons who have neglected to first thoroughly study those 
vital topics. The necessary sequence of this omission has 
been failure to correctly define value and explain the causes 
of changes in prices and wages, and fluctuations in the rate 
paid as interest for money and rent of real estate. Al- 
though many have been misled and bewildered by preten- 
tious crudity, an understanding of the aforesaid subjects 
simply requires average ability and careful thought. 

No panacea for all social ills has been discovered. Man- 
kind must slowly learn, in the future as in the past, chiefly 
by disastrous blunders and by painful groping after truth. 

These pages are nevertheless presented with the earnest 
wish that they may shed some light on the great problems 
of the immediate future, viz.: What measures does impartial 
justice require shall be adopted to protect and preserve the 
equal rights and proper relations of creditor and debtor, of 
capital and labor ? What political action will best prevent 
the strong, the cunning, and the rich from. insidiously op- 
pressing and robbing the weak, the simple, and the poor? 
How shall we displace that fruitful source of evils — a cur- 
rency whose purchasing power is subject to frequent and 
great changes — by money convenient to use and of more 
uniform value than any we have heretofore employed ? 
Without encouraging laziness and waste, ignorance and vice ; 
without fettering industry and enterprise, thus hindering 
production, what measures will tend at once to diminish 
dangerous wealth and dangerous poverty and increase the 
numbers of those whose instincts and material interests 
alike link them to the preservation and development of 
liberty and order, virtue and intelligence ? 



SOCIAL STRUGGLES. 



INTRODUCTORY CHAPTER. 

Natural Laws are not only Invariable but they apply Impartially to all 
things. — Common error of mistaking the Results of bad Statutory 
Laws for unavoidable Results of Natural Laws. — What Political 
Economy is. — A Mistaken Belief. — How Economic Laws should be 
Considered. — Mankind are Governed by many Emotions and 
Thoughts. — Common mode of writing Economic works. — Political 
Economy is an Imperfect Science. — A Confession. — Ignorance is the 
Mother of Credulity. — Why Mankind make such slow Progress. 
— Original Thought is not Common. — Mankind prefer Old to 
New Things. — Evils Perpetuate Themselves. — Need of Elementary 
Study. — Terrible Fruits of False Premises. 

Nothing is permanently settled imtil eorrect principles are 
adopted. Public policy zvill be fixed zu/ien based on absolute 
truth. There may be a lull in the agitation of social topics, 
but, if so, sooner or later it will inevitably re-appear zvitJi in- 
creased volume and force. Eddies exist in human thougJit 
and Jiuman progress, but, nevertheless, they form a steady and 
continuous stream. 

This is not a world of chance, but a world of law. It is 
not a world of accident, but a world of cause and effect. 
It is therefore folly to imagine that existing conditions have 
come upon us in a mysterious, miraculous way. Whenever 
a result is produced, we should feel certain that its parent, 
a cause, can be found, if we will but diligently search for it. 

If we lift a stone from the ground and let go of it, the 
same thing always happens. It does not move upward or 
sideways ; it always falls directly toward the earth's center. 
This we call the law of gravitation. By the term "■ law " 

I 



2 SOCIAL STRUGGLES. 

we mean the course and conduct invariably observed and fol- 
lowed by all things placed under the same circumstances. 
Therefore, when we speak of the " law " relative to a given 
thing, we mean the mode of action and the result which al- 
ways take place and follow the existence of a certain combi- 
nation of facts. 

WHAT POLITICAL ECONOMY IS. 

Political economy may be defined as a statement of the 
course relative to wealth, which human affairs will probably 
take under given conditions. In other words, it describes 
how men will think and act under certain circumstances. 
It is a description of some of the laws which regulate human 
conduct. The wealth of a squirrel consists of his house and 
his store of food. These satisfy his wants and make him 
rich. Whoever should write an accurate description of the 
conduct of this interesting little fellow in getting and using 
his riches, would write the political economy of a squirrel. 
A description of man's conduct when in quest of riches, 
when using riches already acquired, and the results flowing 
from his various modes of trying to accomplish these pur- 
poses constitute the political economy of man. The wants 
of man are rarely satisfied. Therefore he is seldom as rich 
as a squirrel. But he is continually occupied either in trying 
to get wealth, or in using it. In doing these acts his con- 
duct resembles that of a squirrel : that is, he usually follows 
a certain course of action in order to obtain a certain thing, 
or produce a certain result. These actions and their results 
have a tendency to assume uniform and definite shape and 
character. They are the reflections of human thought from 
the mirror of varying circumstances and conditions. Want 
of discernment may, and often does, prevent its full recogni- 
tion ; but the shadow must always be a correct image of the 
substance. The forces which have a constant tendency 
to produce these uniform results are called the laws of polit- 
ical economy. 



HO IV TO STUDY MANKIND. 



A MISTAKEN BELIEF. 



It is a prevalent belief that the laws of political economy 
are so abstruse and mysterious that a life-time of prodigious 
study is required to understand them. Especially is it sup- 
posed that there is something peculiarly difficult about Fi- 
nance, that special and supernatural laws preside over 
money, and that it is impossible for an average man to com- 
prehend the subject. The common-sense principles which 
we every day apply to the solution of all other problems are 
presumed to be inapplicable to political economy. This be- 
lief has been put in circulation and fostered by those whose 
selfish interests would be advanced by the impression that 
only a few persons can understand political economy, and 
that they constituted those few. We shall hereafter show 
the gross nature of this imposition. 

HOW ECONOMIC LAWS SHOULD BE CONSIDERED. 

To state how a squirrel always gets and uses his wealth, 
would be a comparatively easy task. But man has a more 
complex mental organization ; he has a greater number of 
wants and a greater variety of means to gratify them. 
Man has a multitude of desires besides getting and using 
wealth, and the attempt to gratify these desires makes his 
conduct in greater or less degree different from what it 
would be if his wants were as simple as those of a squirrel. 
The conduct of a man with the mind of a squirrel would al- 
ways be what some men call " economic " ; that is, it 
would be governed by a smaller number of laws than it now 
is. Man's conduct when in pursuit of wealth and the re- 
sults of such conduct would be uniform. But in fact we 
cannot predict what the "economic " conduct of a man or 
a nation will be or what will result therefrom, under certain 
conditions, without estimating other dominant motives be- 
sides the desire to acquire wealth. We cannot study the 
anatomy of a man's muscles without examining his skeleton. 
We cannot understand the mechanism of his lungs or 
any other portion of the body without a reference to all 
other parts. The whole system must be considered. In 



4 SOCIAL STRUGGLES. 

like manner when we study the conduct of the human race, 
we must take into account all the causes which produce 
and modify it. 

Man is not a mere machine or automaton. He is a living 
animal moved and directed by a cabinet of counselors 
more numerous and changeable than ever advised any king 
or other potentate. They are human passions, human emo- 
tions and human thoughts. All human affairs are due to 
some form of human action. All human action is due to 
the action of the human mind. 

Therefore any student of political economy must ob- 
serve imperfectly, and argue from false premises, just so far 
as he ignores human nature. His conclusions must neces- 
sarily be correspondingly defective and false. 

The great majority of writers on political economy have 
imagined and assumed an ideal type of human nature and 
of human conduct flowing from this assumed type. This 
ideal man is governed purely and entirely by selfishness and 
avarice, — his whole purpose in life is the acquisition of 
wealth. Actions in harmony with the supposed feelings of 
this imaginary man they have styled " economic conduct, " 
and at the same time have conceded that mankind never act 
*' economically." This is merely a mode of obscuring the 
subject. We care nothing about the conduct of a being 
who exists only in the imagination ; but we are deeply inter- 
ested in the actual conduct of the actual man. 

MANKIND ARE GOVERNED BY MANY EMOTIONS AND 
THOUGHTS. 

Selfishness is a dominant trait of the majority, but this 
has a hundred other objects besides wealth. Moreover, 
every man, no matter how selfish, has a greater or less 
streak of generosity in his nature. Every community 
has a minority of unselfish persons whose precepts and ex- 
ample exert a vast influence on the rest of society. Patriot- 
ism, religion, love of home and family, in short, every 
emotion of the human heart, has more or less influence on 
the conduct of each individual unit of society. The 



THE NEED OF COMMON SENSE. 



5 



social tendencies and movements of a nation are a resultant 
of the combined and conflicting ideas of each and every 
individual member of that nation. Consequently, we can- 
not estimate the result of a given measure without taking 
into account all the forces with which it will be brought in 
contact. Every cause which materially tends to influence, 
modify, or direct human thought and human action in any 
respect is directly or indirectly a factor in the problems 
of political economy. Men arrive at different conclusions, 
largely because they begin to reason with a different bias. 

COMMON MODE OF WRITING ECONOMIC WORKS. 

The value of the majority of works on political economy 
is impaired by the fact that their authors have not, as they 
should, made the discovery of truth the sole object of their 
investigations. They have attempted to explain social 
tendencies and conduct in such a way as to defend the 
existing social and political institutions of their country. 
As most of these writers have been, and are, subjects of 
monarchical and aristocratic governments, and believers 
in them, much of what is called political economy is 
merely a special plea in favor of those governments and the 
conditions of society which they foster. 

In the United States, ninth-tenths of those who are 
styled political economists are mere copyists and imitat- 
ors of foreign books and their teachings. These persons 
regard European institutions as models to be admired and 
not criticised. 

Theories which contain more romance than truth and 
common sense doubtless amuse and interest some persons ; 
but they are of no use in studying the various problems of 
political economy. 

We must ponder human nature as it is. We must grap- 
ple with the facts as they actually exist. We must severely 
scrutinize all books written for the purpose of vindicating 
or supporting an existing form of government or state of 
society. Above all, we must remember that the truth is 
never dangerous. We must not shrink from it even though 



6 SOCIAL STRUGGLES. 

it seem in conflict with moss-grown and beloved institu- 
tions. 

The majority of economic writers have made a curious 
error. They have looked around them and seen disorders 
which are the results of misgovernment, selfishness, and 
ignorance ; — evils which exist because the best of us are 
largely in ignorance of the true principles of civil govern- 
ment and social science. But under the delusion that our 
social and political institutions are perfect, or nearly so, 
they mistake these phenomena for the inevitable results of 
human association under all possible circumstances. The 
symptoms of a diseased social condition have been mistaken 
for those which would appear in perfect political and social 
health. 

POLITICAL ECONOMY IS AN IMPERFECT SCIENCE. 

The pretense is virtually made that Political Economy 
has reached a point where it can be called a perfect science. 
A science is a methodical arrangement of facts and of 
principles deduced from those facts relating to a particular 
subject. A science is perfect in proportion to the extent 
that all the facts and principles relating thereto are fully 
and accurately known. The sciences of law and medicine 
have been studied and written upon for thousands of years 
by the ablest men of every generation. They are con- 
stantly advancing but are still full of imperfections, and in- 
stead of claiming that they are perfect, the most eminent 
lawyers and physicians are foremost in pointing out, and in 
attempting to remedy, the defects of those sciences. But 
political economy is not an ancient study. The first syste- 
matic book on that subject was published by Adam Smith, 
in 1776. The next most important work was written by 
David Ricardo, in 18 17. Political economy embraces a 
wide range of facts and principles. It deals largely with 
that most complex of all things, human nature, and its 
manifestations and tendencies under certain conditions. It 
is not only a comparatively new science, but its study has 
hitherto engaged the attention of a relatively small num- 



FALSE PRETENDERS. 7 

ber of competent persons. Its few students differ widely 
in some of their conclusions, and many of its principles are 
in controversy. Therefore the air of perfect knowledge as- 
sumed by a few " Professors " who have thrust themselves 
before the public as infallible authorities on this subject is 
ridiculous. * The great majority believe that the subject of 
national finance is entirely different from other business 
matters, and governed by obscure and complex laws pecul- 
iar to itself. This error has been created and fostered 
chiefly by school-masters and bankers, who find a profit in 
such a public belief. In a variety of ways every one of 
those persons is frequently saying in substance : 

" The masse's of the people can never understand the cur- 
rency question, because its literature is so extensive and pro- 
found that years of careful study are required for its com- 
prehension. But only look at me : I am a very learned 
man. I have studied this matter for many years and under- 
stand all its deep mysteries. Now, as it is impossible for 
you to grasp the profound and peculiar principles which 
underlie the financial question, I will tell you what to be- 
lieve. If not so instructed, I am afraid you will take some 
political action which will injure yourselves." 

By a singular coincidence these benevolent pieces of wis- 
dom invariably direct the people to adopt the line of policy 
which favors their author's personal interest. Most of 
those who write financial articles pretend to be possessors 
of a vast amount of undivulged learning. They do not 
say : " I am stating the principles of finance as far as I un- 
derstand them." They continually talk about stating the 

* A considerable proportion of so-called " economists " are clergy- 
men, who have quit preaching the sublime unselfishness of the Nazarene, 
and engaged in the business of proclaiming doctrines pleasanter to rich 
and privileged listeners. To this more congenial task they have mostly 
brought mental peculiarities which place them in affiliation with the ma- 
jority of other " economists " ; viz., greater love of dogmas than of truth, 
and the inveterate habit of assuming statements true, without examina- 
tion or evidence, and then basing arguments upon them as if the prem- 
ises of the reasoning had been established. 



8 SOCIAL STRUGGLES. 

elementary principles of finance and refer to the " conclu- 
sions arrived at by those who have fully explored the sub- 
ject." 

The insinuation is constantly made that what is stated is 
merely a fragment of great learning, and that every asser- 
tion contained therein is sustained by a mass of knowledge 
unknown to the public. 

A CONFESSION. 

As a full confession is said to be good for one's soul, I 
admit once supposing the above-named and kindred state- 
ments to be true. What was stated seemed so contrary to 
common sense that I failed to understand how it could be 
true, but supposed this arose from ignorance of undisclosed 
facts and principles. Impelled by a curiosity to know just 
what the hidden depths alluded to were, I carefully ex- 
amined the writings of those called masters of this occult 
science, and found that an old artifice had been repeated. 
In all ages of the world, jugglers, priests and necromancers 
of various kinds have attempted, and generally successfully^ 
to magnify their own importance and accomplish their pur- 
poses by raising a smoke and affecting a special knowledge 
of some wonderful mystery. To this old trick I found 
myself the victim. 

Since that time, whenever I see a man styling himself a 
" scientific financier " and telling his hearers or readers to 
defer to his wonderful attainments, I smile at the memory 
of my own deception and say to myself : This person has 
put on his paint and feathers and is practicing the tactics of 
an Indian Medicine Man. Exteriorly he is a " scientist " ; 
remove his outer garments, dig a little into his pretensions, 
and a charlatan is exposed to view. Directly or indirectly, 
he is getting pay for practicing an imposition on the public. 
The mysteries he pretends to possess a knowledge of do 
not exist. 



THE SIMPLICITY OF NA TURE. 



IGNORANCE IS THE MOTHER OF CREDULITY. 

We are born credulous. We naturally believe whatever 
is told us until knowledge and experience teach us better. 
We start in life believing in the truthfulness of all. If we 
live to mature age, we are convinced that the world is full 
of liars. Ignorance and credulity are born every day. 
Knowledge and experience are daily dying. Thus a new 
crop of victims for imposters continually comes forward. 

Each individual's life is a miniature picture more or less 
perfect of the passage of the world from ignorance and 
superstition toward knowledge and free enlightened thought. 

Just in proportion to their ignorance, mankind are filled 
with the idea that many things possess supernatural qualities, 
and that unusual events are produced by a miraculous force. 
As they become enlightened they cease to believe in ghosts, 
hobgoblins and witchcraft ; they gradually see the folly of 
supposing that the Creator made his works so imperfectly 
that he finds it necessary to exercise a fitful and irregular 
supervision over them ; and finally they recognize the sim- 
plicity of events. Nature grants no charters, and enacts no 
special or private laws. None of her decrees can be evaded. 
She is utterly relentless toward all who attempt to defy her 
mandates, and has no Court of Pardons where special inter- 
position can be hoped for. Her laws are so general that they 
apply with rigid and impartial severity to every subject and 
thing on earth, and so far as we know, to all the planets in 
the heavens. Strictly speaking, it is impossible to break a 
natural law. We can easily get broken ourselves in trying 
it, but the law remains unchanged. 

Until a comparatively recent time astronomers supposed 
that an elaborate mechanism held the heavenly bodies in 
place and produced their movements ; but they could never 
conceive of anything complex enough to explain all the facts, 
and their theories melted away when a few men thought for 
themselves, — saw the folly of generation after generation who 
had blindly trod in each other's footsteps, and showed that 



lO SOCIAL STRUGGLES. 

thousands of circling worlds were maintained by the simple, 
all-pervading law of gravitation. 

The physician of the tenth century saw one or more spe- 
cial demons in nearly every patient. He imagined that the 
majority of diseases, especially all malignant ones, were the 
result of the machinations of witches or other evil minded 
and strange spirits. Therefore he concluded that equally 
peculiar and mysterious remedies were needed for each dis- 
tinct malady. A bold pretense of the possession of occult 
art was the special thing which commended him to an igno- 
rant and credulous people. The more profound his ignorance, 
the greater the confidence reposed in him. 

Medical science has developed by slow and painful steps. 
Both physicians and patients have fondly clung to methods 
which now seem almost incredible. But each century has 
witnessed the reluctant flight, never to return, of some pre- 
posterous error or some peculiar demon. Especially during 
the last century has a growing, positive knowledge sup- 
planted the hidden and strange by the known and familiar. 
When examining a patient the physician now sees universal 
laws at work ; instead of a particular devil he now discerns 
what disordered functions the remedial forces of nature are 
trying to restore to their normal condition. He no longer 
attempts to work a special and miraculous cure, but guided 
by fixed general principles he seeks to assist the natural 
forces. 

Comparative anatomy and physiology have shown that the 
Great Architect did not make a special design when he 
created man. He merely added a few lines to the working 
drawings whereby the fish, the bird, and the beast were 
wrought out and given the functions and faculties which 
maintain their existence. One general plan and idea ap- 
pears to run through all forms of life from the lowest to the 
highest. One general system of simple laws governs all their 
physiological functions, and all their diseases have charac- 
teristics in common. 

Every partially successful attempt to draw aside the cur- 
tain which hides nature's secrets has always surprised us in 



MANKIND HATE TO THINK. 



ir 



the same direction ; viz., wonder at finding an unlooked-for 
simplicity. The discovery that light, heat, motion, and 
electricity are all different forms and manifestations of the 
same force warrants us in supposing that the future has 
greater surprises in store for us, and all of them revelations 
of the general and simple character of nature's laws. 

Facts and illustrations showing that nature's laws are gen- 
eral, and that we believe in the special and miraculous in 
proportion to our ignorance, could be cited and employed 
indefinitely. 

The foregoing considerations explain why such a multi- 
tude of persons have been led to believe that money pos- 
sesses supernatural qualities. Such beliefs vanish whenever 
a moderate amount of careful study is bestowed on finance. 

THE PLAIN TRUTH. 

The fact is that a man can understand the money ques- 
tion without being possessed of superior ability, and without 
devoting years to its study. To many persons the most 
dif^cult thing is to get rid of previously acquired supersti- 
tions and errors. There is nothing obscure or difficult 
about it and there are no mysterious laws which specially 
preside over money. The value of money is regulated by 
precisely the same laws that regulate the value of steel, 
coal, wheat and every other article bought and sold in the 
markets. In considering money we should use the same 
business principles and common sense that we apply when 
we form a judgment about any other subject or thing. 
History shows clearly that the numerous errors and whimsi- 
cal notions into which individuals and nations have fallen in 
regard to money have been chiefly caused by assuming that 
money was controlled by such extraordinary laws that plain 
common sense and judgment were of no use in forming an 
opinion about it. 

WHY MANKIND MAKE SUCH SLOW PROGRESS. 

There is nothing peculiarly difficult about the study of 
social questions. But the same lion in the way that has 



12 SOCIAL STRUGGLES. 

always retarded human progress in every direction of 
thought and effort, stands grimly in the path leading to cor- 
rect ideas and information about economic subjects. 

This terrible beast is the difficulty we all have, more or 
less, in changing the beliefs acquired in infancy. Early im- 
pressions and prejudices are most lasting. Children are 
naturally credulous. But although credulity is a normal 
trait of children, it forms in adults a defect of character 
which in every age has wrought most mischievous and dis- 
astrous results. 

Each generation is the child of its ancestors and the 
parent of the next generation. The father teaches the son 
and the son soon becomes a father and a teacher. Errors 
are thus handed down from age to age without ever being 
examined by their believers. Whoever investigates them 
and exposes their falsity is called a disturber of the public 
peace. 

A great majority of the community frequently declare 
themselves " shocked " at what they hear or read. One 
man is shocked by a proposition to pass a new law or to 
repeal an old one. Another is shocked at some radical 
political idea and another is shocked at some new doctrine 
in regard to the temperance question, or the proper mode 
of treating criminals. One person is shocked at what gives 
pleasure to another, and the man who is delighted with one 
"shocking" sentiment is often shocked himself by some 
idea not half so radical and startling as the one that pleased 
him. 

A society of eminently respectable and well-disposed peo- 
ple may for a long time hear preached some ancient but 
false religious doctrine whose tendency is to degrade and 
debase the mind and character of all who believe it. They 
are not shocked to hear this pernicious doctrine repeated 
week after week. But some day they hear a man who be- 
lieves it his duty to publicly pronounce the old faith a libel 
on the Deity and a poisonous, stifling cloud on the mind of 
every person who entertains it. 

Forthwith a hum is heard, like that of a swarm of angry 



CONCEIT AND COWARDICE. 1 5 

bees. The hearers are fearfully "shocked" and the query 
is : What shocked them ? 

They were not shocked because a groveling superstition 
had been believed. The fact that a certain doctrine was 
spoken ill of was the apparent, but not the real, cause of 
their disquietude. 

They were shocked simply because their habitual train 
of thought was disturbed, and because they were forced to 
suddenly consider a new idea. The average man can be 
" shocked " at any time by suddenly thrusting a new idea 
at him, and it makes but little difference to what subject 
the new idea relates, provided an implicit belief therein ap- 
pears to him important. 

ORIGINAL THOUGHT IS NOT COMMON. 

Independent thought is so painful to the majority of 
mankind that comparatively few persons have original 
thoughts or ideas. They believe what they have been 
taught when children, and what their associates regard as 
truth. When an idea is once in their heads they adhere to 
it with the utmost tenacity, not so much because they love 
the old idea as because they dislike to consider a new idea, 
—they hate to think. It is a disagreeable process for them 
to investigate a subject — to find that their old belief was 
wrong, and to be forced to accept a new one. It is dififi- 
cult for them to abstractly ask the simple question, whether 
the old or the new idea be the truth ? They have a shrink- 
ing fear of such a question. The old idea is associated in 
their minds with existing laws, institutions and customs, 
.and they feel a sense of safety in having it remain undis- 
turbed. 

Even if convinced that the new idea is true, they dread 
the consequences of its diffusion, and have a vague horror 
of its effect upon themselves or upon society. In fact, 
more confidence is felt in existing beliefs and institutions 
which they are convinced are wrong, than in an abstract 
idea which they are satisfied is right. 

No one can read the history of his kind without being 



H 



SOCIAL STRUGGLES. 



amazed at the almost incredible stupidity which has char- 
acterized every age and nation. We wonder why certain 
acts were done, when a better course would have been so 
much easier, and all explanations are futile until we remem- 
ber that by-gone generations had precisely the same pro- 
clivities and were as cowardly as the men now living ; they 
trod in the footsteps of their ancestors ; they did not im- 
agine they could be radically mistaken, that much remained 
to be learned, and above all, they abhorred the labor of 
thinking. 

The human race has progressed so slowly because nearly 
every one has been educated to consider trtie whatever 
opinion was held by the great majority, and to reject as 
false whatever ideas were advanced by a small minority. 

In all social and political problems the aversion of the 
great majority to new ideas is a potent factor. Without 
recognizing it we cannot rightly estimate how far the 
effect of laws of comparatively recent enactment has been 
modified by pre-existing prejudices ; neither can an opinion 
of any value be formed concerning the probable influence 
which any proposed change in law or custom would exert 
within a few years' time. 

MANKIND PREFER OLD TO NEW THINGS. 

Whoever im.agines that even the most intelligent com- 
munity stands ready to immediately accept and profit by a 
new and more truthful idea, a wiser law, or a better custom, 
and hazards his personal welfare on such a supposition, 
will find himself wofully mistaken. 

The inertia of mankind keeps trade in accustomed 
channels long after better and cheaper goods can be ob- 
tained from a new source. Trade-marks become valuable 
after long use, largely because people have acquired the 
habit of using goods with a particular brand, and dislike to 
change. An old college, or school of any kind, will have 
more pupils than an equally good new one. People em- 
ploy the old doctor long after a younger and better one has 
moved into the adjoining house. The old tool is not at 



REPRODUCTION OF EVIL. 



15 



once superseded by the improved one. A newly invented 
machine must have extraordinary merit to insure its speedy 
adoption. A kind of money with which a community has 
long been familiar will be received in preference to a more 
convenient but new form of currency. Old customs and 
old modes of conducting the various affairs of life are fol- 
lowed long after the superiority of new ones has been 
demonstrated thousands of times. 

The benefit which a community or nation would other- 
wise derive from a wise reform of any kind may be largely 
nullified for a long period by an inveterate prejudice against 
it. In considering whether an innovation is advisable at a 
certain time, it is well to inquire how far it will meet the ap- 
proval of society. Food must be digested before it nour- 
ishes an animal ; and laws and the majority of people gov- 
erned by them must assimilate before any measure can be 
fairly and fully tested. 

EVILS PERPETUATE THEMSELVES. 

The poet tells us : 

" The evil that men do, lives after them." 

This is a brief and poetic mode of stating the fact that 
the evils generated by bad legislation exist long after the 
repeal of their primary cause. The wounds and social 
diseases of society heal very slowly, from the fact that the 
characteristics of a people stunted and degraded by the long 
continued deprivation of liberty and opportunities of social 
and intellectual improvement, are transmitted to the next 
generation. If the ill effects of long carrying a heavy burden 
disappeared as soon as the grievous weight is removed, a 
nation steeped in stolid ignorance could at once be trans- 
formed and elevated by substituting good for evil laws. 
But under the most favorable practicable conditions it would 
require a long time to transmute the millions of Russian 
and Turkish peasants, for example, into such self-re- 
specting, intelligent and thrifty freemen as the farmers of 
Central New York. 



1 5 SOCIAL STRUGGLES. 

Marks of the grinding despotism to which the French 
peasantry were subjected prior to the French revolution still 
exist. The fact that for centuries the laborers of England 
have borne a cruel injustice accounts for much in their con- 
dition and character to-day. The discontent of Ireland is 
not simply the result of existing laws ; back of them lie 
the results of five hundred years of oppression, with a swarm 
of bitter memories. The passions aroused by the conflict 
which occurred over a century ago between England and the 
United States have not yet subsided ; the embers smolder, 
but are still warm and could easily be fanned into a fierce 
blaze. Many supposed that all the angry feelings attendant 
on the bloody war which raged in this country from 1861 to 
1865 would speedily disappear after Appomattox. But our 
dissensions will not be healed until after every actor in that 
great drama is beneath the sod, and ugly scars will remain 
long afterward. The American people did not properly ap- 
preciate that the evils of slavery would remain long after 
every negro had been declared a freeman. And, at this day, 
it is not fully realized that the people of the Southern 
States must needs for a long time be under the influence of 
the same forces that create and guide public opinion in the 
Northern States before we can be as united, as a nation, as 
one of the States is united as a State. All social or politi- 
cal measures taken without reference to this must largely be 
failures. 

NEED OF ELEMENTARY STUDY. 

In concluding this chapter, the reader's attention is called 
to a simple matter of great importance. That is, the gener- 
ally overlooked fact that it is utterly impossible to ever un- 
derstand any subject, no matter how plain or simple it may 
be, without first becoming master of its elementary princi- 
ples. We must learn the alphabet, else we can never read. 
We must learn to add, to subtract, to multiply and to divide 
before we can understand arithmetic. 

Furthermore, we can never acquire a full knowledge of 
anything unless our ideas about its first principles are cor- 



NEED OF COKKECl- PREMISES. 



17 



rect. Our premises must be right. If the first step be taken 
in the wrong direction, no matter how long we walk without 
turning we shall not reach the place where we wish to go. 
We must carefully sift the truth from the falsehood. Stu- 
dents of astronomy never reached the truth so long as they 
started with the premise that the sun moved round the 
earth. 

At railroad centres several trains are often seen moving 
along in the same direction on the same track. Soon one 
train gradually diverges from its first course, makes a long 
graceful curve and moves westwardly. Another train keeps 
on due northerly ; while a third train departs from its first 
direction by a broad sweep and goes easterly. These differ- 
ent movements are caused by an instrument called a switch. 
The deflection caused by it is so slight at first that the ob- 
server with his eyes fixed upon the train usually fails to 
note the precise point where the divergence began. If a 
train is once switched upon the wrong track no amount of 
speed or length of time will bring it to its destination. It 
can only be got to the proper place by taking it back to the 
switch and putting it on the right track. 

What a switch is to a railroad train, elementary principles 
are to a student of any of the problems of political economy. 
Unless he start right, unless he have clear and correct fun- 
damental ideas, no amount of time or study will enable him 
to understand those topics. Years of study will only add 
confusion to his mind and lead him farther from the truth. 
Of necessity, his opinion on any point is utterly worthless. 

The same thing is true of the study of all other subjects. 
History presents many examples of generation after genera- 
tion of diligent students and learned men, all pursuing the 
same study or profession without reaching the truth. In 
the outset of their studies they assumed that the primary 
principles taught by their predecessors were true, when in 
fact they were false. 



J 8 SOCIAL STRUGGLES. 

TERRIBLE FRUITS OF FALSE PREMISES. 

A large portion of history is occupied with the revolting 
story of bloody religious wars and cruel persecutions on ac- 
count of religious belief. This appalling amount of wrong 
and suffering can all be traced to the false premise stated in 
one sentence, viz., "Free thought on religious topics is a 
crime." This premise, believed true, made the forcible at- 
tempts of men to suppress all religious opinions at variance 
with their own just as logical and inevitable a sequence as 
their efforts to repress theft were a logical result of a belief 
that theft was a crime. The faulty premise was the foun- 
tain from which a multitude of other errors flowed. The 
great historian, Lecky, has shown us how naturally relig- 
ious persecutions began when said premise was believed true, 
and how impossible for them to exist whenever said prem- 
ise was believed false. 

For century after century medicine was studied from the 
standpoint of supposing that the arteries were filled with 
air. Thousands of similar examples could be cited, all show- 
ing that our ancestors often got on the wrong track, and 
never reached the desired point until they went back to the 
switch, sifted out the truth and started from correct prem- 
ises. Mankind have rarely taken a forward step in the 
shortest, simplest and easiest manner. False premises have 
almost invariably led them to take the longest and most dif- 
ficult route to reach a point which might have been attained 
by one easy step. 



CHAPTER II. 

What is Money? — Its Functions; very Important that all should Under- 
stand. — Prevalent Ideas about Money. — False Dogmas by the Mill- 
ion. — How the People came to be Misled. 

By artifice and corriiption, measures based on false prhici- 
ples may be imposed upon a misguided people. But success so 
procured can only be temporary. Sooner or later the truth 
will be discovered, ivrongful legislation zvill be repealed, 
and its authors and abettors will be stigmatized as crafty char- 
latans, or, at least, as men ignorant of the subject upon ivhich 
they presume to enact laws. 

This is one of the most important practical questions in 
political economy, for its answer largely decides the na- 
tional financial policy.. This, many persons suppose, is a 
matter of little personal concern to them ; but, in fact, the 
prosperity of every individual is either helped or hindered 
more or less by it. Persons of small means, and those who 
work for day wages, generally suffer relatively more from 
an erroneous policy than those in affluent circumstances. 
Therefore every primary fact and principle relating to 
money should be slowly and carefully dissected and under- 
stood before trying to take a step in advance of this ABC 
of financial knowledge. 

PREVALENT IDEAS ABOUT MONEY. 

In the first place let us try to get a clear view of the 
beliefs about money which are generally accepted as true. 
This will prepare the road, and the reader will then be 
better ready to take up the subject of money at its root and 
trace it upward. Perhaps this can be done most easily by 
reciting the history of some of the efforts which have recent- 
ly been made in this country to define the term *' Money," 
and by stating some of the results flowing from those 
efforts. 

19 



20 SOCIAL STRUGGLES. 

From 1865 to 1879 the statement was made and printed 
millions of times that greenbacks were not money, and that 
nothing was or could be money but coins made of gold or 
silver. Beginning with Bonamy Price, " scientific finan- 
ciers " made speeches in all the principal cities, in which 
they asserted, with the assured air of persons confident of 
superior wisdom, that trade could not properly be carried 
on without money ; that it was impossible to make money 
out of paper, and that therefore the only financial salvation 
of the country lay in burning the greenbacks and using 
gold and silver in their stead. 

The question was triumphantly asked : " How can a man 
pay his debts without money ? " Then the sad fate of a peo- 
ple unable to pay their debts, because, although rich, they 
had no money, was depicted and bemoaned, and the audi- 
ence were pathetically exhorted to rid themselves of pieces 
of rags and get real money. 

One eloquent "Professor" was' taken from Massachu- 
setts and carried from place to place throughout the West- 
ern States, in order that he might have a better chance to 
cry out to the farmers : — 

"For many weary years you have been cheated and plundered. You 
have sold your produce and have received no mone}'- in payment — you 
have been swindled with worthless rags ; rags with which values cannot 
be measured, and therefore you do not know how much value you get for 
your grain, nor how much you pay for what you buy in exchange. It is 
now time for you to sternly demand the money— the solid coin — before 
you part with your hard-earned products." 

These so-called high authorities told us — 

" that as the function of money was to measure value, it could not dis- 
charge its functions unless it possessed intrinsic value. As a bushel 
measure must have capacity in order to measure volume, and a yard- 
stick have length in order to measure length, so money must have value 
in order to be a measure of value. Value must be an inherent quality of 
money, just as sweetness is an inherent quality of sugar. Therefore 
nothing is money unless the raw material from which it is made is 
worth as much as the completed coin. The government stamp on a 
coin of gold or silver adds nothing to its value — it merely certifies its 



MYSTERIOUS EFFECT OF GOLD. 21 

weight and fineness ; i. e., the inscription states the amount of intrinsic 
value contained in it. 

" Moreover, it is impossible for the stamp of the government on any- 
thing to add any value to it which it did not possess before. A law de- 
claring any piece of paper, or even any coin of gold or silver, to be 
money, and stating its legal-tender value, does not add one particle of 
real value to it. Legal-tender money, therefore, has no actual value 
whatever, except the intrinsic value of the materials from which it is 
made. In case of paper currency, this intrinsic value is just what a 
paper manufacturer will pay for this spurious money to grind into pulp. 
Greenbacks, therefore, are only really worth what they will bring by the 
pound when sold as old rags. 

" Wealth can only be created by the proper union of labor and capital. 
Wealth cannot be created by legislation. Paper currency is a mere crea- 
tion of law and is not wealth. If all the paper currency of the country 
were burned up in a night, the prosperity of the country would not be 
affected in the least. No wealth would be destroyed by such a confla- 
gration beyond the value of some paper rags. 

" Laws can easily be enacted which will transfer wealth from one per- 
son to another person, or from one class of persons to another class of 
persons ; but no law ever did, or ever can, create one particle of wealth. 
If money and wealth could be created by law, then a government would 
never need to levy taxes — it could readily legislate itself into the posses- 
sion of both those desirable things whenever they were needed. 

" Paper currency has no utility, except to the extent that it is a conven- 
ient representative of real money. It should be convertible at par into 
coin at all times, on demand of its holder. Beyond compelling banks of 
issue to be constantly ready to redeem their paper currency in coin on 
presentation, a government has no legitimate right to have anything to 
do with banking. A government should therefore never issue paper 
currency." 

I remember hearing one of these wise men lecture on 
*' Money " and say : — 

" The sight of gold produces a wonderful, mysterious impression on the 
human mind. When a man has anything for sale the sight of gold at 
once creates this sensation in his brain — it incites him to immediately 
place the lowest possible price on his goods in order to get possession of 
the coveted object, the glittering coin. Consequently the possessor of 
gold coins has in hand an accurate measure by means of which the real 
value of whatever he wishes to buy can at once be determined. But this 
curious effect is not produced by greenbacks, and this is one reason why 
greenbacks are not a correct measure of value. 

" It is requisite that a pound weight should always weigh the same ; that 



22 



SOCIAL STRUGGLES. 



a bushel measure should always hold the same quantity ; and that a yard- 
stick should always have the same length. In like manner, a measure of 
value should always possess the same value ; otherwise it becomes a 
means of deception. 

" Gold and silver, unlike other things, have a fixed, unvarying value ; 
consequently gold and silver are the only things from which a fixed 
measure of value can be made. Hence we find that all civilized nations, 
in all ages, have used gold and silver as money. Coins of gold and silver 
are the money of the world. But it must be borne in mind that these 
coins are not capital. They are unvarying measures of value which can 
be exchanged for capital." 

FALSE DOGMAS BY THE MILLION. 

Editorials, speeches and pamphlets, setting forth, in a va- 
riety of forms, but all containing substantially the foregoing 
ideas, were printed in great numbers. The " fixed value " 
of gold and silver was a point dwelt on with special empha- 
sis, and large numbers of pamphlets were written for the 
special purpose of setting forth the enormous advantages 
to be derived from using a " fixed measure of value": to 
wit, gold and silver coins. That gold and silver could 
fluctuate in value like other commodities was deemed a 
proposition so absurd as not to demand refutation. 

The authors of these statements claimed to represent the 
most perfect scientific researches, and asserted that all 
who differed from them were profoundly ignorant, thor- 
oughly dishonest ; or a mixture of those undesirable qual- 
ities. 

It is undoubtedly true that by far the greater portion of 
the financial legislation of the world originated from a belief 
in the truth of the aforesaid ideas. If they are correct, 
then the legislation based on them is correct, and we have 
substantially reached perfection in finance. It also follows 
that the startling inequality of wealth, the vast amount of 
pauperism, the great fluctuations in prices, the frequent 
panics and periods of business depression, accompanied by 
numerous bankruptcies, are all right too ; they are bitter 
but wholesome medicines ; they are an unavoidable inci- 
dent of human affairs which it is folly to attempt to 
prevent. 



A SUDDEN CHANGE IN DOCTRINE. 



HOW THE PEOPLE CAME TO BE MISLED. 



23 



The vast majority of the American people had never 
given serious thought to the subject of national finance, and 
were easily persuaded that it was a very intricate subject, 
and that the " scientists " had a rnonopoly of monetary in- 
formation. Accordingly they proceeded to translate their 
beliefs into laws and actions. Taught that silver was a 
"fixed" measure of value, one of their earliest desires was 
to get rid of the evils and sufferings which they supposed 
were inflicted by fractional paper currency. Accordingly, 
at an expense of about fifty millions of dollars in the outset, 
and at a yearly cost of several millions more, the fractional 
cui-rency was destroyed and fractional silver coins put in 
circulation with the confident expectation that a " fixed 
measure" had been substituted for a " fluctuating spurious 
money." But the anticipated benefits failed to appear, and 
many persons observed that trade was not conducted any 
more easily or accurately than with paper currency. 

Since that time the " learned financiers " have radically 
changed their teachings. Instead of saying that gold and 
silver have a " fixed value," they now gravely inform us 
that gold has a " fixed " value and that '' silver has become 
a metal which fluctuates in value." 

This repudiation of a doctrine which has long been taught 
as confidently as a mathematical demonstration has puzzled 
many plain persons. They have said to themselves: "Sil- 
ver is precisely the same metal and has exactly the same 
qualities that it had a thousand years ago. The nat- 
ural laws of to-day are the same natural laws which have 
always presided over silver. What, then, is meant by the 
statement that silver has recently acquired qualities which 
it has never hitherto possessed ? Why does gold stand still 
while silver moves? Why are times worse than before the 
prescriptions of financial doctors were taken ? " 



CHAPTER III. 

Why we use Money. — What a Science is.— How to study Money. — What 
Capital is. — Distinction between Wealth and Capital. — No use for 
Money when no Wealth exists. — A Colony without Wealth. — Need 
of Tools. — Value of a Thing is Dependent on Circumstances. — The 
Value of Land. — Need of Capital. — How Commerce began. — 
Definition of Trade. — How Trade is often Carried on. — What Sim- 
ple Barter is. — Advantages of Direct Barter.— Mechanism of Ex- 
changing Things by Use of Money. — -Who are Principals in a 
Trade. — Simple Barter is Still in Use. — How Barter tends to Pro- 
duce Fair Bargains. — Bartering Labor. — Making " Bees." — Growth 
of Classes. — What a Snob is. — Barter often the Best Way to Trade. 
— Profits of Middlemen. — Barter could be Employed more than it 
is. — Best Test of Wages. — Facilities for Barter should be Increased. 
— Importance of Citizens being Acquainted. — Wealth of Cities. 
■ — Facts in regard to Middlemen. — Parallel Railroads. — Increase of 
Middlemen. 

False premises ahvays lead to false conchisions. No matter 
how able and ingenioiis a person may be, ivhen he makes an ex- 
tended statement in regard to any subject, he zvill inevitably 
contradict himself, if the premises from zvhich he reasons are 
incorrect. 

We have now, in substance, stated the doctrines of those 
M'ho call themselves " scientific financiers " and are gener- 
ally believed worthy such a title. But as all history and ob- 
servation tell us that a man is not always what he calls him- 
self, nor what the majority believe him to be, let us care- 
fully examine this matter ourselves. 

WHAT A SCIENCE IS. 

A science is not a compound of truth and falsehood and 
a classification of the prmciples deduced from such a mixt- 
ure. No doctrines are truly scientific unless they are the 
product of sound reasoning from facts verified by careful 
examination. Therefore, before we can certainly know 

24 



IV//V MONEY IS DESIRED. 



25 



whether a related series of statements which purport to be 
''scientific" are actually so, we must first ascertain if the 
premises be true. We must examine the alleged founda- 
tion facts and see if they actually exist. If we find that 
such facts have been correctly stated, we must then consider 
whether the reasoning from those facts has been properly 
done. If we find any statement or theory which is the re- 
sult either of bad reasoning, or at variance with positive 
facts, we have conclusive proof that such statement or the- 
ory is partially or wholly false. Moreover, we have reason 
to suspect that the whole fabric of the so-called science is 
built on foundations more or less rotten and defective. 

HOW TO STUDY MONEY, 

A plow is comparatively a simple tool. But no one can 
fully understand the meaning of the word " plow " without 
carefully watching one in operation. He must learn why 
and how it is used before he thoroughly knows what the 
tool is and why it is made just as it is. 

The same is true of everything. In order to clearly un- 
derstand the meaning of the term "money" we must act 
just as we do when we want to fully understand anything 
else. We must begin at the bottom of the subject ; we 
must first learn the uses of money — why we use it and the 
purpose we accomplish by using it. 

As the chief use of money is to act as the symbol and rep- 
resentative of wealth and capital, those terms must be un- 
derstood before the use of money can be comprehended. 
Many persons suppose that the labors and sacrifices of man- 
kind have for their object the possession of money. There 
are a small number of insane persons called misers, who 
spend years of hard labor and privation for the sole purpose 
of collecting money and fondly gazing at it. But, with 
these few exceptions, human industry is not incited by the 
desire to obtain money. The first and ever dominant mo- 
tive to labor is the imperative necessity of providing food, 
shelter, warmth and clothing sufificient to maintain life. 
After the actual necessities of man's animal life are sup- 



26 SOCIAL STRUGGLES. 

plied, his intellectual and moral nature make still further 
demands. Men labor to supply the wants which they have 
in common with the lower animals ; they labor to obtain 
means to gratify their emotions, passions and tastes, and 
they are continually goaded to industry by an ever widen- 
ing circle of real or fancied wants. These objects of human 
endeavor are comprised by the. term "wealth." 

The miner for silver and gold has not fully attained his 
object when those metals are in his possession. He ex- 
changes them for a homestead, a farm, or such other com- 
modity or thing as his necessities and fancy may dictate. 

Man's vanity continually prompts him to desire an honor- 
able and prominent position among his fellows, and in the 
estimation of the majority such a place is reached by the 
possession of a greater abundance and better quality of the 
necessaries and luxuries of life. Wealth is also desired as a 
means of gratifying social, moral, and religious sentiments. 

When wealth can be obtained without money, men care 
nothing for money. Beyond the small amount of wealth 
absolutely necessary to maintain life, men care nothing 
for wealth whenever their desires can be obtained without 
wealth. An office which brings little money and much 
honor is eagerly sought for. Human desires of various 
kinds generate the force which makes the world a scene of 
unceasing struggles. Money is eagerly sought as a means 
of getting wealth, and wealth is desired as a stepping-stone 
to gratify the myriad cravings of the human mind. 

WHAT CAPITAL IS. 

Capital is whatever mankind use to create and procure the 
necessaries of life ; it is the tool which labor uses to make 
wealth. Capital is the product of labor — it is labor put into 
a more or less permanent form — into something by the use 
and help of which it is easier to obtain food, clothing, fuel, 
shelter, and other needs and desires of men. Any tool, ma- 
chine, agency, or thing which facilitates the creation of 
wealth, by making labor more effective than it otherwise 
would be, is capital in the full sense of the term. The 



ADVANTAGES OF OWNING CAPITAL. 



27 



crooked stick which our ancestors used centuries ago to pre- 
pare the soil for seed was capital just as truly as the steel 
plow devised by modern science and skill. 

Suppose a ship's crew were wrecked on an uninhabited isl- 
and. The waters around them swarm with fish — the woods 
are alive with birds — but the crew are in danger of starvation 
because they have no means of killing either fish or fowl. 
With great difficulty one man makes a rude spear, or hook, 
wherewith to catch fish. Another makes a bow and arrows 
to kill birds. By the aid of these imperfect tools starvation 
is averted. The spear, the hook, and the bow are capital ; 
labor has created capital, and capital has helped labor to se- 
cure food. 

Without consciously making an argument, the makers of 
these tools have demonstrated that capital is the child of la- 
bor and shown the falsity of the dogma that " Labor can do 
nothing without the help of capital." In the beginning of 
society there was no capital. Labor had to create it. 

If the owner of one of these weapons should lend it in" 
consideration of receiving an equitable portion of the game 
captured therewith, that would be an example of loaning 
capital at a fair rate of interest. If the weapon-owner 
took advantage of the hunger of those who had nothing but 
their naked hands, and loaned the means of catching game 
for an unreasonable portion of the game, that would be ex- 
tortion and usury. 

As men progress from a rude state of ignorance and pov- 
erty toward knowledge and wealth, the forms of capital and 
the modes of collecting rent and interest become more nu- 
merous and complex ; but the principle involved remains 
the same as in the foregoing simple examples. 

DISTINCTION BETWEEN WEALTH AND CAPITAL. 

In civilized communities, wealth can readily be exchanged 
for capital, and capital can be exchanged for wealth. In 
many cases, the same thing is both wealth and capital. A 
farmer's bin of potatoes is wealth. He can cook and eat 
them. He can also use them to create more potatoes — he 



28 SOCIAL STRUGGLES. 

can plant them, and in that form the potatoes are capital ^ 
they assist the farmer to create wealth. A flock of sheep is 
both wealth and capital. It is capital when used to produce 
wool and raise lambs. It is wealth when used for the flesh 
and skins. 

But many forms of capital are not wealth, simply because 
they do not and cannot directly supply man's wants— they 
are a remote link in the chain which carries wealth to man- 
kind. The tools and machinery by the help of which 
threshing machines are manufactured are not wealth but 
simply capital. They help labor create the machine ; the 
machine helps the farmer to get the grain, and the grain is 
wealth. 

Forms of wealth which are not a direct or indirect means of 
helping labor to create other wealth, are not capital. Ele- 
'gantly bound volumes of poetry, fine paintings, elaborately 
carved musical instruments and kindred things, are wealth 
because they supply the artificial wants of mankind. But 
they are not usually tools or means for creating other wealth, 
and therefore are not capital. 

NO USE FOR MONEY WHEN NO WEALTH EXISTS. 

Having defined wealth and capital we are now ready to 
consider why we use money. The proper beginning of 
such a study is to learn under what circumstances money 
is not used. 

In a state of absolute poverty mankind would have no 
use for money, simply because they would have neither 
wealth nor capital, and therefore nothing would exist which 
they wanted to sell, to buy, or to exchange. Labor would 
exist, but until it had created some wealth, or some capital, 
wages paid in money would be of no use to the laborer ; no 
one would want to sell his labor for money unless thereby 
his wants could be gratified. 

The possible use of money begins with the acquisition 
of wealth. The richer a community is the more use it has 
for money ; it has more to sell and wants to buy more. 



W//y MONE V HAS UNDERGONE CHANGES. 



29 



The poorer a community is, the less use it has for money; 
it has less to sell and less ability to buy.* 

In all probability mankind existed a long time before 
money would hav^e been of any use to them, even if they 
had possessed what we now deem the best kind of money. 
After sufficient progress had been made to render the use 
of money possible, it was probably a long time afterward 
before its utility was discovered. 

The earliest kinds of money were like the earliest tools 
of all kinds, rude and inconvenient. As mankind have 
painfully and at irregular intervals of time developed intel- 
ligence on all other subjects, so they have slowly and fit- 
fully learned to improve their money, and have invented 
better modes of using it. The history of money is the 
story of man's progress from poverty, superstition and 
ignorance toward wealth, liberty and knowledge. To say 
that our present money is perfect is equivalent to saying 
that we have reached in all respects the highest state of 
perfection of which the race is capable. 

Perhaps some things in regard to the uses of wealth, cap- 
ital and money can be more easily understood by stating an 
imaginary case wherein money at first would be of no use. 

A COLONY WITHOUT WEALTH. 

Suppose a village of a thousand persons, with a variety 
of trades and occupations, should have all its inhabitants 
some day suddenly snatched from home and placed on the 
back of a comet, — no one having a single thing in posses- 
sion but the clothes he had on. Suppose they were 
landed the next day on a planet similar in all respects to 
our world except that it was uninhabited by mankind. 
Further, suppose they arrived in the southern portion of 
the temperate zone, where wild fruit could be obtained 
in abundance sufficient to sustain life. 

* This is the reason why the money of different countries varies so 
enormously in volume. A rich country actually needs far more money 
per capita than a poor country. 



30 



SOCIAL STRUGGLES. 



Those persons would be in a condition similar to that of 
primitive man, with, however, one enormous advantage : 
they would be possessed of knowledge which it has taken 
our race thousands of years to acquire. 

What would this colony in all probability do? At first, 
they would be filled with consternation and despair, but 
perennial Hope would soon partially restore their spirits 
and they would set out in quest of drink and food. No 
one would regret the lack of money, simply because noth- 
ing would be lost by its absence. As none of the neces- 
saries of life could be bought with money, it would be 
utterly worthless. 

NEED OF TOOLS. 

A remark about the intrinsic, unvarying and perpetual 
value of gold and silver would be received with derision. 
Every individual would be intent on securing the primary 
needs of life, viz., food, drink, clothing, shelter, warmth, 
and protection from enemies. 

They would want the simplest forms of wealth, and 
would go to work to get them. After satisfying thirst 
and hunger, their next desire would naturally be to provide 
a shelter from the sun and storm — they would want to 
build houses. They would not think how much money a 
house would cost, nor desire money to build it with. The 
pressing problem would be. How shall we construct some 
kind of a shelter ? 

At once, the imperative need of tools to work with 
would possess every mind. The idea in the sentence: 
" Capital is a tool used by labor in creating wealth," would 
recur to them with an intensity of meaning it never before 
possessed. Their thoughts would turn to their former 
possessions, — but they would not desire many things for 
which they had toiled when on this earth. They would 
want working capital more than many other forms of wealth. 
A sharp steel ax would seem to them of more intrinsic 
value than a wheelbarrow full of gold eagles. They would 
rather have a sledge-hammer, a shovel, a pick and a crow- 



WHA T CREA TES VAL UE. ^ j 

bar than all the paintings, pianos and ornaments they had 
ever seen. The distinction between capital, by the use of 
which labor can readily create wealth, and those forms of 
wealth which cannot be so used, would be impressed very 
sharply upon them. 

While slowly and laboriously cutting a stick of wood in 
two with a sharp stone, one of these colonists would sigh 
when he thought how easily and rapidly the work could be 
done with a buck-saw. He would remember that when on 
earth four buck-saws could be had for one day's labor, and 
would naturally think how delightful it would be to get one 
buck-saw for one month's labor. 

It would then be plain to him that the amount of labor 
which a person is willing to give for a certain thing does 
not depend on the thing itself but on the person's situation 
and necessities, and that he will willingly give more or less 
labor for it as circumstances and conditions change. This 
conclusion would lead him to ask whether the value of 
things not bought directly with labor was not governed by 
the same rule as when paid for directly by labor. 

VALUE OF A THING IS DEPENDENT ON CIRCUMSTANCES. 

He would observe that the same things had far different 
values in his estimation then from what they had when in 
his old home. As these different ideas of value were 
attached to precisely the same things, he would see that 
the values were not inherent and intrinsic in the things 
themselves. If they were, the same value would always be 
attached to them ; because an intrinsic quality of a given 
thing is inseparable from that thing so long as it remains in 
existence. 

The colonist would next say to himself : *' Everything 
has a different value in my eyes now from what it had 
when in my former circumstances. Nothing has changed 
but circumstances and conditions. 

" Therefore nothing whatever possesses absolute, intrinsic 
and inherent value ; the worth of a thing depends entirely 
upon the circumstances with which the thing is surrounded, 



32 



SOCIAL STRUGGLES. 



• — upon the relation which it has to the condition and 
necessities of mankind. 

" As the value of a thing is entirely due to the conditions 
by which it is environed, it necessarily follows that every 
change in those conditions must change the value of that 
thing just as the reflections of a mirror must change when 
diff'erent objects are placed before it." These propositions 
he would talk about with his fellow-colonists and would 
find no argument necessary for their acceptance, as every- 
one had already unconsciously imbibed them from the hard 
facts of daily experience. 

THE VALUE OF LAND. 

Parties would take short journeys in different directions 
to explore the country. They would discover vast natural 
meadows of fertile soil, and magnificent forests of good tim- 
ber. They would think how valuable this soil and tim- 
ber would be if situated in the vicinity of their former home, 
and of how little worth they were under the existing cir- 
cumstances. The value which their life-long education 
had taught them was one of the most real and solid of 
all kinds of values — viz., the value of acres of fertile land — 
they would see, was like all other values,— the result of the 
conditions under which the land was placed, its relation to 
man and his need and ability to derive wealth from its use. 
They would recognize that the term "valuable," when ap- 
plied to anything, is simply a brief mode of stating the cir- 
cumstances and conditions under which that thing is placed, 
and the relation which it bears to mankind in consequence 
of those conditions. Furthermore, it would be plain that a 
considerable portion of those conditions are creations of 
custom and law. 

NEED OF CAPITAL. 

We have seen that our imaginary colonists, impelled by 
instinctive love of life and its enjoyments, have gone to 
work to create wealth and capital, with nothing to aid them 
but their knowledge and naked hands. Part of their indus- 



NECESSITY OF ECONOMY. o, 

try would necessarily be first devoted to gathering means 
of subsistence from day to day. This labor would leave 
them no richer at one week's end than another. They 
would clearly see that the only way to escape from their 
destitute condition was by accumulating capital. The im- 
perative need, not only of supplying daily arising wants but 
also of practicing economy of time and food, would be 
sharply forced upon their attention. Thus the first lesson 
which must be learned by every one who wishes to acquire 
even the smallest amount of wealth or capital would be 
taught and illustrated hourly by the constant presence of 
ugly facts. 

More fully than ever before they would realize how com- 
paratively inefficient a man's work is when he is without 
tools, and consequently their earliest savings of time and 
labor would be expended in procuring various substances 
wherewith to make rude implements of different kinds. 

' HOW COMMERCE BEGAN. 

One man would make a journey to a rocky hill, and after 
patient search among the fragments of rock would find a 
sharp-edged stone, suitable for conversion into a stone ax. 
Straightway he would think that perhaps a better stone 
could be found, and would continue his efforts until in pos- 
session of several stones. Doubtful which stone was the 
best of the lot, with great fatigue he would carry a load of 
them into camp. From an excursion along the sea-shore 
another man would return laden with shells suitable for use 
as drinking-cups. Another would bring in a bundle of 
sticks of wood which could be used as ax-handles or as 
clubs to beat off wild beasts. 

These three men would meet and exhibit their treasures 
to one another. The owner of the sharp stones could not 
use all of them himself, and would at once wish to exchange 
one stone for an ax-handle, and another stone for a shell 
to make into a drinking-cup. The owner of the shells 
would have more of them than needful, and would prefer 
3 



34 



SOCIAL STRUGGLES. 



to have fewer shells and to own instead a sharp stone and a 
good stick. The owner of the sticks with little reflection 
would conclude it far more desirable to have a smaller num- 
ber of sticks, and in place of those parted with, have a shell 
for a cup and a sharp stone to fasten on the end of one of 
the remaining sticks. 

Thereupon these three persons would exchange goods 
with one another, and similar exchanges of simple, rude 
articles would take place between a considerable number of 
the colonists. Commerce would begin. A few persons are 
simply a fractional part of the world's population. When 
we learn how two or three men will naturally trade with 
each other when placed under certain circumstances and 
actuated by certain motives, we have a substantially correct 
miniature picture of what two or three hundred, two or 
three thousand, or two or three million men will do under 
similar conditions. Essentially similar motives produce es- 
sentially similar conduct. The germs of the vast commerce 
which encircles the globe all exist in the aforesaid simple 
exchanges. 

In trade of all kinds the first event in the progress of its 
birth and growth occurs when A learns that something is 
in the possession of B, the ownership of which the fancies 
or the necessities of A cause him to think will give greater 
satisfaction, pleasure or power than a certain amount of his 
own labor or some commodity which he already possesses. 
A conference is held between A and B. The relative value 
of things is agreed on and an exchange is made. 

When the world's commerce is viewed as a whole, it ap- 
pears such a tangled net-work of trading, buying and selling 
that no one can understand it, or explain the motives which 
cause goods to be incessantly shipped hither and thither. 
But when these apparently complex commercial transac- 
tions are dissected, they resolve themselves into the simple 
combination of facts which caused the aforesaid trades be- 
tween the colonists, and between A and B. 

Each one of the three colonists aforesaid gave a thing 
which he did not need for a thing which he did need. Or, 



UNFAIR BARGAINS. 



35 



more accurately speaking, he gave what he thought he needed 
least, for what he thought he needed most. 

DEFINITION OF TRADE. 

Trade has been defined as " an exchange of the superfluous 
for the necessary." This is a correct definition in many in- 
stances. C gives D something which is superfluous to C, but 
necessary to D. D gives C something which is superfluous 
to D, but necessary to C. This is undoubtedly the natural 
manner in which all exchanges of commodities and labor 
would be made, if mankind were governed by the Golden 
Rule. No one would then be obliged to labor for another 
person unless by so doing he received as much benefit as he 
conferred. The workman would then give his labor and re- 
ceive in payment therefor what he needed, but which was 
relatively superfluous to his employer. When a man traded 
he would always dispose thereby of something of little or no 
benefit to himself until exchanged for something else for 
which its previous owner had less need than for what he 
took in exchange therefor. 

HOW TRADE IS OFTEN CARRIED ON. 

But in fact injustice and oppression have always prevailed 
to a large extent throughout the world, and there are no in- 
dications that their reign will terminate this year. Ex- 
changes of commodities, and of labor for commodities or 
money, are not always a mutual benefit. One of the parties 
to the transaction often gets by far the best of the bargain. 
Vast numbers of persons have been, and are to-day, com- 
pelled by various forms of commercial dishonesty, and by un- 
just legislation backed by ruthless power, to dispense with 
or forced to sell many things which are not strictly superflu- 
ous, and thereby subject themselves and families to priva- 
tion and suffering. Inequitable taxation, exorbitant rent 
and interest, unfair bargains, inadequate wages, and legis- 
lative robbery in different forms, compel multitudes to go 
without some necessaries for the purpose of getting or re- 
taining other things still more needful for their comfort and 



36 SOCIAL STRUGGLES. 

happiness, and perhaps vitally essential to a bare subsistence. 
Therefore, trade as it is actually carried on should, in a large 
percentage of cases, be defined as an exchange of things 
which appear to one of the parties to the bargain of less ne- 
cessity, for things which appear oi greater necessity. 

Instead of always selling or exchanging superfluous things, 
mankind frequently dispose of what they want to keep for 
the purpose of obtaining something for which their wants 
are still greater. It would therefore be better to define trade 
as an exchange of what can be most easily parted with for 
something more needed. 

WHAT SIMPLE BARTER IS. 

The aforesaid exchanges of the colonists are examples of 
trade by complete and direct barter. Neither money nor 
credit has been used, and no merchant, banker, broker, com- 
mission merchant, shipper or middleman of any kind has 
acted for or between the different parties. The transaction 
has been effected with the smallest possible amount of ex- 
pense, viz., the time of the parties themselves while making 
the trade. No one has traded with the idea of getting a 
thing for a low price and keeping it until a future time when 
more could be had for it. In each case the producer has 
given the fruit of his labor directly to the consumer, and has 
received in return the product of another man's work which 
is wanted for personal use. The advantages of the trade 
are confined to the persons who are principals of the ex- 
change. No fee, commission, or profit has been paid to, or 
made, by any third party to the transaction. 

ADVANTAGES OF DIRECT BARTER. 

Thousands of years have passed since our ancestors first 
made exchanges similar to those aforesaid. Meanwhile 
human ingenuity has been taxed for the purpose of invent- 
ing other ways of trading than by direct barter. • These en- 
deavors have been produced by the difficulty which often 
occurs, of the parties directly meeting each other and bring- 
ing their goods with them. The result of these efforts to 



BENEFITS OF DIRECT TRADE. 3>r 

overcome inconveniences has been the construction of ad- 
mirable commercial machinery whereby a man who wishes 
to exchange his labor, or the product of his labor, with 
another man for the product of that man's labor, can indi- 
rectly do so without ever meeting the man with whom he 
really trades. 

The shortest distance between two points is a straight 
line drawn from one point to the other. When a meeting 
is practicable between two men who each possess some- 
thing which the other wants, it is obvious that the shortest 
road to an exchange is direct barter ; no third article or 
third man intervenes to make the route a circuitous one — 
the line is drawn straight and direct. It follows that 
wherever and whenever it is practicable for the parties to 
meet and mutually supply each other's wants, no means of 
making exchanges has ever been invented which is as good 
as the primitive method of complete and direct barter. 
This is one of the comparatively few cases in which per- 
fection in the manner of doing an act appears to have been 
reached the first time the act was done. 

When one thing is given directly for another thing, there 
is less opportunity for errors in judgment and mistakes in 
estimating relative value than occurs when one thing is 
given for a third article, and then the third article is given 
for the desired object. Only two things are compared with 
one another; the parties are not called upon to appraise a 
third article. After the relative value of the two things is 
decided on, only one exchange is made, and this is always 
simpler and plainer than when two or three exchanges are 
made. 

MECHANISM OF EXCHANGING THINGS BY USE OF MONEY. 

In illustration of this, let us now carefully note the differ- 
ence between a simple barter, and an exchange in which 
money is used. 

R has more apples than he wants, and would like to ex- 
change one barrel of apples for a barrel of potatoes. S has 
more potatoes than he wants, and would like to exchange 



38 



SOCIAL STRUGGLES. 



one barrel of potatoes for a barrel of apples. The simplest 
way for R and S to have their wants supplied is for R to 
cart his apples directly to the house of S, to exchange with 
S for a barrel of potatoes, and then put the potatoes di- 
rectly in the cart and take them home. 

Instead of trading by the aforesaid barter, if R take the 
apples to the store of C, a fruit dealer, and sell them for 
money, the relative value of the apples and a certain amount 
of money must first be arrived at. In other words, the 
price of the apples is fixed and then the money is handed to 
R. One exchange and an appraisal of the relative value of 
two articles, viz., the apples and the money, has then been 
made, but R has not yet got what he wants. 

R takes the money received for the apples to the store of 
T, a dealer in vegetables, and examines a barrel of potatoes. 
Then the relative value of the money is compared with the 
value of a barrel of potatoes, and after this appraisal is 
made, R hands the valuation to T and takes the potatoes. 

Two exchanges and two sets of appraisals have now 
taken place, but S has not made the exchange which he de- 
sired to make. In order to do so he carts his potatoes to 
the store of T, and T and himself estimate the value of a 
barrel of potatoes compared with a certain amount of 
money; that is, they decide what the price of the potatoes 
shall be, and this is the same thing as deciding what the 
price of the money is. T pays the amount of money de- 
cided on to S and takes the potatoes. 

S then takes the money received for the potatoes to C 
and looks at a barrel of apples. S and C then appraise 
the value of the apples and the value of the money ; that 
is, the price in money of the apples is decided on. S then 
hands the determined amount of money to C and takes the 
barrel of apples home with him. 

WHO ARE PRINCIPALS IN A TRADE. 

After all these exchanges and cartages have been made, 
R and S have both done in a roundabout way what they 
might have done by direct barter. In this transaction R 



MIDDLEMEN LEVY TOLL. ^Q 

and S are the real persons, the principals, who have ex- 
changed goods with each other. C and T are merely go- 
betweens. They are middlemen, helping R and S trade for 
the purpose of making a profit out of both of them. 

If R and S had bartered with each other, neither one of 
them would have incurred the risk of being a loser at the 
hands of C and T, by reason of a faulty judgment of values 
by R or S ; or by the possible superior shrewdness, which 
may border on dishonesty, of C and T. In a direct barter 
between R and S, a certain barrel of apples and a certain 
barrel of potatoes, both of a particular quality, would be di- 
rectly before each man. In making an appraisal of values 
this barrel of apples would be compared with that barrel of 
potatoes. Each man would know at once how he was going 
to come out — what would be the final result of the trade. 
But when the appraisal of values was made between R and 
C and T, and between S and T and C, the value of apples 
and potatoes in general was estimated, instead of a special 
valuation of a particular barrel of apples or potatoes. At 
least the general value of those articles had more influence 
on the minds of the appraisers than it would if the object 
were merely to compare the value of one designated barrel 
of apples with that of one designated barrel of potatoes. 

Leaving at present out of view the fact that C and T 
have both made a profit out of R and S, it is evident that 
the chances of an equitable bargain were diminished by the 
exchanges which were made to reach the final end desired. 

In the foregoing illustration there are only two middle- 
men between the producer and consumer. But in the ordi- 
nary course of commerce, where direct barter is not used, a 
considerable number of persons often intervene between the 
real parties to the exchange. The more hands two things 
given in exchange for each other pass through before each 
thing reaches its final destination, the greater the probabil- 
ity becomes that one or both of the original owners of 
those things will not receive a fair return for what was 
parted with. 

It is certain that the producer and the consumer of a cer- 



40 



SOCIAL STRUGGLES. 



tain thing must, either directly or indirectly, pay the com- 
missions charged by the third parties as toll for having that 
thing pass through their possession. 

SIMPLE BARTER IS STILL IN USE. 

By reason of the foregoing advantages attending it, di- 
rect barter to a considerable extent has survived the inven- 
tion of money, and the many devices for making exchanges 
with representatives of money. This is so not only in 
localities where money is scarce and exchanges few and 
simple in character, but direct barter is still carried on in 
the great centers of wealth and population. In London 
and Paris newspapers are now printed which make a spe- 
cialty of helping persons make direct trades with one another. 
A portion of their advertising space is devoted to notices 
similar to those given below which were taken from a re- 
cent London paper. 

EXCHANGES. 

" Well mounted slides of pigeon dispatch, used during the siege 
of Paris, in exchange for two slides of interest, also well mounted. 
— L. Hawkins, Hillside, Hastings. 

" Wanted, standard works on natural history, in exchange for fossils 
and algse. A good copy of Goldsmith's 'Animated Nature,' colored 
plates, 2 vols., well bound, for four dozen good micro, slides.— 165 Well 
street, Birmingham. 

"A valuable collection of British mosses (120 specimens), with notes, 
from herbarium of late W. Valentine, offered for Cooke's ' Hand-book 
of Fungi.' — G. E. Massee, 8 West Grove Terrace, Scarborough." 

It appears not improbable that the public press will here- 
after be used far more than it has been for bringing to- 
gether persons who can mutually supply each other's 
wants by direct barter. We could thus restore the op- 
portunities for trading face to face which were enjoyed by 
our ancestors when hamlets, farms and forests existed where 
larp-e cities now stand. 



LESS DANGER OF BEING MISLED. . j 



HOW BARTER TENDS TO PRODUCE FAIR BARGAINS. 

Let US now consider a specimen case, which may show 
the tendency of direct barter to prevent those who wish to 
make an exchange from being confused and misled by side 
and irrelevant facts and issues and being cheated in con- 
sequence. 

Suppose M wants to exchange his colt for a fine cow, 
and N wishes to exchange his cow for a colt. If M is 
pleased with N's cow and N likes M's colt, nothing can be 
simpler than for M and N to bring their animals to a place 
of meeting and there compare the relative merits and value 
of the cow and the colt. The range of debate is thereby 
made as small as possible. Whether live stock at that 
time is high priced or low priced,— whether the Winter is 
likely to be severe or the Summer very dry, — whether feed 
will be plenty or scarce and high, and a number of other 
considerations, are all shut out as foreign to the question be- 
fore M and N, viz.. What is the relative value of these two 
animals ? 

The manner in which barter often benefits both parties 
and prevents troublesome disputes may perhaps be still 
further shown by an example of direct barter of labor for 
labor. 

F and H are farmers and each one has three stalwart sons 
living at home with their father. Their farms lie near to- 
gether but are quite different in quality. F's farm has a 
subsoil of sand and gravel, but the farm of H has a subsoil 
of heavy clay. As a result of this difference, the farm of 
F produces early crops while the crops on H's farm are of 
slower growth and are later in ripening. When F's corn is 
ready to hoe, the corn of H is just coming up. 

F then says to H : "I have a large field of corn which 
needs hoeing at once. You come and help me hoe my corn 
and when yours is ready I will help you hoe yours." H 
agrees to this, and early the next morning a little army of 
men has invaded F's cornfield, — F and H and their six 
sons are at work, cheered alike by one another's company 



42 



SOCIAL STRUGGLES. 



and by the rapidity with which the weeds are cut down. 
*' Many hands make light work." 

In a few days F's large cornfield is free from weeds and 
presents a beautiful sight to a farmer's eye. In a short 
time the corn of H needs hoeing, and then F and his sons 
join H in hoeing his corn until H has received as many 
days' labor as he has given F. 

Neither F nor H has used either money or commodities 
in making this exchange. Both have traded a day's work 
when they could most easily spare it for a day's work when 
they needed it most. The value of each day's labor has 
thus been increased. The wages of a day's labor have been 
a day's labor. There has been no possible chance for any 
disputes about the number of hours which a man should 
work in a day, the rate of wages, nor about any other of 
the disputed questions concerning the proper relations of 
capital and labor. The exchange has furnished steady 
employment, and enabled both parties to accumulate a 
certain number of days' work to be used when wanted. It 
has also promoted good feeling and pleasant relations 
between neighbors, which is a matter of considerable 
importance. 

BARTERING LABOR. 

The foregoing example of directly paying for labor with 
similar labor literally describes the custom of " changing 
work " which prevails more or less throughout the agricult- 
ural portions of the country. It is generally practiced 
more in the new, than in the old settled sections. Fifty 
years ago, in the neighborhood where my boyhood was 
passed, it was a universal custom, which existed by reason of 
the scarcity of money, the difficulty of obtaining laborers in 
sufficient numbers when an urgent need of their services for 
a short time arose, and the feeling of equality and kindli- 
ness which prevailed between the farmers. 

I remember seeing a case of the application of this mode 
of barter which illustrates its simplicity and efficiency. In 
December, C agreed to deliver sixty cords of wood, for a 



A SUCCESSI-UL WOOD BEE. 



43 



certain price per cord, at a designated place before the first 
day of the next April. It was important to the buyer that 
the wood should be delivered at the specified time. A 
series of mishaps occurred to C, the result of which was that 
about the middle of March the wood had been chopped, 
drawn from the woods and piled along the highway, but 
none of it had been drawn to market. Just before that 
time snow had fallen. The sleighing was good, but liable 
any day to be spoiled by a thaw. If this happened the 
roads would be left in such a bad condition that it would be 
impracticable to draw the wood during the remainder of the 
month. C would therefore be unable, with his own team, 
to deliver the wood as agreed. Even if the buyer should 
permit him to deliver it in April, after the road had settled 
and become good, he would then be unable to spend the 
time requisite to draw the wood, because the Spring plow- 
ing and sowing would have to be attended to at once. 

C could not hire the neighboring farmers with money for 
two reasons, each one of which alone was sufficient. He 
had no money which could be spared for that purpose. If 
he had possessed the money and offered to hire them with 
it, nearly every one of his neighbors who owned teams 
would have been very much offended and refused to hire 
out on such an occasion, as something utterly beneath their 
dignity. 

C resorted to direct barter of labor for labor. He sent a 
boy v/ith a horse and cutter to all the neighbors for some 
distance around, inviting them to " a wood bee," the next 
afternoon. Shortly after noon the next day double teams 
attached to wood sleighs arrived at C's house from all di- 
rections. Some of the neighbors who had no teams came 
with willing hands to help load and unload the sleighs. 

Sleigh after sleigh was driven to the wood pile, quickly 
loaded with wood, and started for the market-place amid 
merry talk and laughter. At the place of delivery a similar 
scene occurred, as one sleigh after another delivered its 
cargo and started back for another load. When the sun set, 
the entire pile of wood had been moved about a mile down 



44 



SOCIAL STRUGGLES. 



a series of steep hills and neatly piled at the place agreed 
on. .The neighbors then went home to fodder their cattle 
and attend to other nightly chores, all pleased with the 
success of the " wood bee." It so happened that a thaw 
spoiled the roads the next day. 

This was a case of direct barter of labor for labor without 
any agreement either verbal or written between the parties 
to it. There was simply the tacit understanding that C 
should conform to established custom, and be willing at 
any time to help any other one of the neighbors in a similar 
manner whenever help was required. 

MAKING " BEES." 

It was customary to make " a bee " whenever an unusual 
number of hands for a few hours were required for some 
heavy work, as raising the frame of a building, for instance ; 
or, whenever a farmer had a very heavy piece of work of 
any kind which he wished speedily done and hated to begin 
alone. Man's social nature made it seem easier to work in a 
large company of acquaintances where the work was speed- 
ily dispatched, as if it were merely a huge joke, than to 
drudge along alone. At these gatherings all the interesting 
news and topics of the region were talked over, and some of 
the old farmers would grow eloquent in descanting on the 
merits of a favorite team of horses, or the strength and en- 
durance of a lusty son. Labor was not the only thing 
which was bartered ; jokes and stories were also freely ex- 
changed. The capacity of telling a good story always in- 
sured its owner an invitation to all the bees in the neigh- 
borhood. Not to invite a neighbor to a bee was considered 
an affront, — an intimation that his society was undesirable. 
Frequently the afternoon's work was followed by a bounti- 
ful supper, and a merry-making at the house of the maker of 
the bee. In this the wives, daughters, sisters, and sweet- 
hearts of the workers participated, and it was often long 
after midnight before the bee broke up. Thus besides being a 
mode of bartering labor, " bees " were to the farmers what 



ARISTOCRA TIC FOOLISHNESS. 



45 



'' parties " of different kinds are to the unfortunates who live 
in cities. 

GROWTH OF CLASSES. 

That the custom of "changing work " and of making 
"bees" has fallen considerably into disuse during the 
last forty years is to be lamented. It shows that the social 
relations between men of small means and those in more 
opulent circumstances are not as cordial and friendly as 
they were ; — that the people are separating into classes 
who do not fully fraternize with each other, and that the 
spirit of the community, in consequence, is less democratic 
than it was. It denotes also the growth of a desire to imi- 
tate men who are so mean and ignorant as to use wealth and 
position solely for the gratification of vanity and other self- 
ish purposes, and to imagine that such conduct confers 
nobility. 

WHAT A SNOB IS. 

Persons guilty of snobbery, i. r., of mean imitation of 
mean conduct, are generally so more because of their lack 
of information and good sense than from inherent baseness 
of heart. They have aspirations for superior things, but do 
not know enough to see the distinction between what is 
essentially admirable and what is superficial, ignoble and de- 
grading. These pretentious persons practically ignore some 
of the cardinal Christian virtues. Let us hope that this 
prevalent ignorance of to-day will melt away before the 
broader knowledge and better spirit of to-morrow. 

BARTER OFTEN THE BEST WAY TO TRADE. 

The simplicity of direct barter and its tendency to pre- 
vent unequal amounts of value from being exchanged 
equally for one another are not its only merits. Whenever 
circumstances make it practicable, it is the most economical 
method of making exchanges ; but, as will hereafter be 
shown, under certain conditions, indirect barter, and pur- 
chase and sale with money, are cheaper than direct barter. 



46 



SOCIAL STRUGGLES. 



Every intelligent mechanic knows that the power of an 
engine, or machine of any kind, is greatest where the force 
is created, or arises ; and that every transmission of that 
power through belts, cogs, shafting, cams, or pulleys dimin- 
ishes it. Part of the power is lost in turning the machinery 
which transfers it from one place to another, or from one 
kind of motion to another. No matter how perfect the 
mechanism, nor how well oiled it may be, more or less waste 
of power by friction is unavoidable. The more complex 
the machinery, and the farther apart its different portions 
are, the greater the expense must necessarily be of realiz- 
ing a given amount of net power from the engine. There- 
fore all the various appliances for distributing the power of 
an engine are necessary evils and should be made as few 
and simple as possible. 

What cogs, belting, shafting and pulleys are to engines, 
merchants, brokers, bankers and middlemen of all kinds 
are to men who wish to exchange things with one 
another. Belting and shafting transfer power ; middlemen 
transfer property. As we shall see hereafter, middlemen 
are often a necessary means whereby exchanges are made, 
but nevertheless they increase the friction and expense 
attendant upon transfers of property from one man to an- 
other ; that is, they make the expense greater than it would 
be if it were practicable to use direct barter. Other things 
being equal, producers receive a less value in return for 
what they create, and consumers give a greater value for 
what they buy, just in proportion to the number of middle- 
men who intervene between them. This is unavoidably so 
from the fact that the necessary expenses, as well as the 
profits of the middlemen, must be borne by those who 
originally sell and those who finally buy. 

PROFITS OF MIDDLEMEN. 

Merchants and agents of different kinds do not always 
transact business for strictly benevolent purposes. 

This may be illustrated by reference to a state of facts 
now existing. 



A COSTLY TRADE FOR THE PRINCIPALS. 



47 



A shoemaker living in Massachusetts wishes to exchange 
a pair of boots for some corn to feed his fowls. A farmer 
living in Iowa wishes to exchange some corn for a pair of 
boots. These two men, lacking facilities for direct barter, 
trade with each other through the intervention of a num- 
ber of middlemen. The shoemaker takes his boots to a 
merchant and sells them for two dollars and forty cents. 
He then takes this money and with it buys four bushels of 
corn. The shoemaker has then exchanged one pair of boots 
for four bushels of corn. The boots are then sent through 
different persons to a merchant in Iowa. The Iowa farmer 
sells twenty bushels of corn for four dollars, and takes 
the money and buys the identical boots which the Massa- 
chusetts shoemaker sold. The farmer has then exchanged 
twenty bushels of corn for a pair of boots. 

The exchange is now completed. The shoemaker has 
got four bushels of corn and the farmer has got the boots. 
Now what has become of the rest of the corn — the sixteen 
bushels which the farmer gave more than the shoemaker re- 
ceived ? The answer is obvious ; the middlemen have got it. 
They have charged the farmer and the shoemaker sixteen 
bushels of corn for carrying a pair of boots from Massachu- 
setts to Iowa and bringing back four bushels of corn. 

In the foregoing illustration, for the purpose of making 
a moderate statement, the retail price of corn in Massachu- 
setts is placed at three times the wholesale price of corn in 
Iowa. It would, however, be much nearer the average 
market rates to state the Massachusetts retail price at four 
times the Iowa wholesale price. This, of course, would 
make the example a more striking one. 

The aforesaid recital of what, in substance, is constantly 
occurring in a countless number of cases, shows how large a 
tribute persons at a considerable distance from each other 
often pay to middlemen. The actual expense of carrying 
corn from Iowa to Massachusetts is considerable, but it 
seems as if the transfer ought to be made in some way so 
that the consumer would not pay three or four times as much 
as tshe farmer receives. Let us now look at a case in which 



48 SOCIAL STRUGGLES. 

the distance between the real parties to the exchange is 
small. 

A farmer living near a city wishes to exchange some 
butter for a coat. At the same time a tailor living in the 
city wishes to exchange a coat for a tub of butter. The 
farmer drives into the city with some tubs of butter, and 
sells them to a wholesale dealer in butter for twenty-five 
cents a pound. He takes the money to a dealer in clothing 
and buys a coat for which he pays twelve dollars. He has 
then exchanged forty-eight pounds of butter for a coat. 
This coat was made by the said tailor who sold it for ten 
dollars, and a couple of days afterward he took this money 
to a retail butter dealer and bought a tub containing thirty- 
three pounds of the same butter which the farmer sold. 
The tailor had then exchanged his coat for fifteen pounds 
less butter than the farmer gave for the same coat. 

If the farmer and the tailor could have made a direct 
barter with each other, they would, between them, have 
saved the butter which the middemen have taken as toll 
for having the goods pass through their hands. In a di- 
rect trade, the tailor would probably have got about forty 
pounds of butter for his coat. 

When a boy; I knew a man who owned a large farm and 
had a fixed policy of disposing of as much of his products 
as possible by direct barter. He was constantly making 
direct exchanges with the blacksmith, the grocer, the 
tailor, the doctor, and with every one else with whom a 
direct barter could be made. The neighbors laughed at 
this and called it what mankind are prone to call conduct 
which they do not understand, "eccentric." He was fre- 
quently asked : " Why do you barter like a savage when 
you can so easily sell your crops for money ? " 

But the farmer kept still and steadily persevered in his 
*' eccentricity." The result was that this settled habit of 
paying his bills largely by direct barter, in course of time 
made him the most prosperous farmer in the vicinity. 

None of his acquaintances saw the fact that by direct 
barter he continually sold his products for a higher price 



TRUE WAY TO MEASURE WAGES. ^g 

than the neighbors did. He made the exchanges which he 
desired to make with a smaller amount of products than he 
would have been obliged to give if middlemen had stood 
between him and those he dealt with. He had no diffi- 
culty in bartering again with a man who had made one 
trade of that kind, because his customers always fared as 
well and often better than they would if their exchanges 
had been made in the ordinary way with money. It would 
be better for the whole community to have more such 
eccentric farmers. 

BARTER COULD BE EMPLOYED MORE THAN IT IS. 

Direct barter of one kind of labor for another kind of 
labor and direct barter of labor for commodities, especially 
in periods of business depression, could be profitably re- 
sorted to far more than they are. It is an error, both prev- 
alent and pernicious, for workmen to suppose that their 
wages are necessarily very low when they do not receive 
pay in money. Idle men not infrequently say : " There 
is plenty of work if you work for nothing but trade. We 
do not want to work for nothing." 

BEST TEST OF WAGES. 

The fact is that a man may receive fair, or even high 
wages, without receiving any money whatever. The true 
test of the fairness of a man's wages is the amount of the 
necessaries of life which he gets for a day's labor. It is 
immaterial to the laborer whether he gets the things he 
needs directly for his wages, or whether he gets money 
and then takes the money and buys the goods. The es- 
sential thing is that the fair value of the labor should be 
balanced by necessaries. Whether this takes place or not 
does not depend on the mode of payment, but on the 
amount of value which is transferred to the workman when 
his wages are paid. Very frequently, in hard times, thousands 
of idle men throughout the country could be put to work 
at once if they would take their wages directly in the prod- 
ucts of the mine, the farm, the mill, and the factory. 
4 



CQ SOCIAL STRUGGLES. 

This course would have a powerful influence in hastening 
the return of better times. 

Suppose a carriage factory in Connecticut, in consequence 
of inability to sell carriages, has discharged its workmen. 
At the same time a rice planter in South Carolina writes : 
" I wish to buy a carriage of you, but cannot sell my rice 
at a fair price." Why could not the planter barter his rice 
for a carriage, and the carriage-maker pay his workmen 
in rice ? Occasionally, woolen factories in New England 
are closed for want of sale for their cloth, and the workmen 
meanwhile are idle, and anxious to know how their bread 
will be obtained if work cannot soon be had. At the same 
time in many sections of the West, farmers who own over- 
flowing granaries of wheat are sorely in need of woolens. 

Why could not a club of farmers send one or more car 
loads of wheat, direct from the nearest railroad station to 
the factory, and receive in return bales of woolen cloth to 
be divided equitably among the contributors of the wheat? 
The manager of the factory could have the wheat ground 
into flour, and paid as wages to the factory operatives. 

Similar things have been done for centuries, and it would 
be far better to do them now than to have society suffer 
such great losses as the idleness of large numbers of per- 
sons necessarily entails. Greater information about political 
economy would often enable farmers, employers and work- 
men to devise and successfully carry out plans for bridging 
a chasm of business stagnation by direct barter. A high 
sense of honor among all classes of citizens would also be an 
important factor in facilitating barter. 

FACILITIES FOR BARTER SHOULD BE INCREASED. 

Government should take measures to facilitate direct bar- 
ter, because thereby individual, and consequently national 
prosperity would be fostered. 

The obstacle to direct barter between persons living re- 
mote from each other is chiefly lack of information. For 
example, a manufacturer of cotton cloth in Massachusetts 



NEED OF GREATER INDUSTRIAL INFORMATION 



51 



may want to barter cloth directly with a Mississippi cotton 
planter. The first question is : To whom shall I address 
my proposition? Not having knowledge of a single plant- 
er's address, the manufacturer abandons the project as 
impracticable. 

Discussion and practical experience have resulted in the 
general conviction that it is sound public policy for a gov- 
ernment to take charge of the distribution and dissemination 
among the people of all kinds of information. To this end 
the Post Ofifice in all its departments is established and 
maintained. For the same purpose, every ten years, at 
great expense, a census is taken and published. At public 
expense we print the speeches of Congressmen, and send 
them with various governmental reports all over the 
country. 

In some countries the Government controls the telegraph 
lines. All these measures have essentially one purpose ; 
i. e., to educate the people and make it easier for every man 
to communicate his thoughts and desires to persons remote 
from himself. In this work, Government should take an- 
other step. Every State should have a Bureau of Industrial 
Information, which, on application by letter, would furnish 
the inquirer with the address of all persons or firms engaged 
in any specified business or industry in that State, together 
with such other information as might be required to enable 
the wants of the different parties to be fully known to each 
other. One man would then be able to directly state what 
he wished to get and what he wished to sell, or trade, in or- 
der to get it. The creation of such a bureau would enable 
a resident of Maine to exchange his goods directly with a cit- 
izen of Texas without paying large commissions of different 
kinds to those who make a profit by the temporary posses- 
sion of property. It would simplify our commercial machin- 
ery, by removing the need of the present great number of 
men who stand between the producer and consumer. Con- 
cerns with a small capital would then have a fairer chance 
of p-etting- business. 



52 



SOCIAL STRUGGLES. 



IMPORTANCE OF CITIZENS BEING ACQUAINTED. 

Whatever facilitates commercial intercourse between citi- 
zens of different States, and their knowledge of each other's 
condition, tends to make us a more homogeneous nation. 
Any measure which makes it easier for a man to learn about 
the peculiarities of soil, climate, industries, and ideas of a 
locality to which he may have some thoughts of removing, 
promotes social relations between all parts of the country. 
Increased knowledge of mutual wants opens new markets 
for labor, goods and skill. It stimulates education of all 
kinds. It makes every citizen feel more fraternal toward 
all others. 

Under our present social system a majority of the large 
fortunes which individuals are constantly acquiring are not 
obtained by those engaged in the creation of wealth. As a 
general rule money is more easily made by acting as a mid- 
dleman than in any other capacity. It is the traders of vari- 
ous kinds, and not the producers, who get the cream of in- 
dustrial efforts. The traders in money usually get the larg- 
est share of profits. 

WEALTH OF CITIES. 

Wealth accumulates in large cities largely because the 
various products of industry pass through those cities on 
their way from the producers to the consumers, and pay toll 
during their passage. Hence the wealthiest cities of the 
world are those through which the greatest amount of prop- 
erty continually passes. In all ages, the wealthiest na- 
tions have been those who acted as middlemen, and handled 
in various ways the property created by other nations. Any 
measure which would enable persons engaged in different 
industrial pursuits to more easily supply each other's wants 
by trading without paying tribute to middlemen, would 
lighten the burdens of the laboring population. The cost 
of exchanging the productions of different portions of the 
country is lessened by a reduction of the numbers of those 



WHEN MIDDLEMExY ARE USEEUL. .55 

who must be paid for the labor involved in making such 
exchanges. 

FACTS IN REGARD TO MIDDLEMEN. 

Much has been said and written in eulogy of the great 
benefits conferred on the community by bankers, merchants, 
and other middlemen. But an analysis of the matter 
shows that they are of service in so far as they perform the 
labor of making exchanges cheaper than the producers 
could do it by directly trading with each other. Beyond 
that point they are burdens on society, parasites living and 
often growing rich on the labor of producers. Every un- 
necessary middleman is so much labor and energy wasted; 
the middleman himself may flourish, but society is poorer to 
the extent of the labor that he might otherwise perform 
in a more useful capacity. Therefore the best interests of 
every community, State, and nation, require the adoption of 
measures, the tendency of which will be to transfer these su- 
perfluous agents into some employment, useful, not simply 
to themselves, but also to the whole people. 

Other conditions being equal, the actual expense to a 
railroad, a merchant, or an agent of any kind, of transfer- 
ring a hundred thousand things from one person to another, 
is not twice as great as the cost of transferring fifty thousand 
things. The net profits of a middleman may be untouched, 
or even be increased, at the same time that his charges for 
performing a certain service are diminished, provided the 
gross amount of his business be sufficiently increased. Con- 
sequently, society can secure the lowest possible expense of 
making exchanges by limiting railroads, merchants and 
agents of all kinds, to the number absolutely needed to per- 
form the requisite service. 

PARALLEL RAILROADS. 

The aforesaid principles have recently been illustrated in 
a striking manner by the construction of parallel railroads 
not necessary to perform the carriage required. In every 
case, such roads have not ultimately cheapened the cost of 



CA SOCIAL STRUGGLES. 

transportation, but have been a loss to the community. 
When an existing railroad charges exorbitant rates, and has 
full capacity to perform all the public service required along 
its line, a parallel railroad should not be allowed to be built. 
The Legislature should at once take the existing road by the 
throat, and say : " We will make you carry passengers and 
freight at equitable rates, and you shall not be allowed to 
say what is equitable. We will establish a fair tribunal 
to decide that question, and will compel you to abide by its 
decision. You shall no longer be the sole judge of your 
own case. The public have rights as well as yourselves." 

INCREASE OF MIDDLEMEN. 

It is a common delusion to suppose that an increase in 
the number of middlemen, and of those engaged in pursuits 
auxiliary to industrial production, necessarily results in a 
competition which lessens the cost to the community of a 
particular service. For example, let us suppose a city which 
actually needs the services of twenty physicians and ten law- 
yers. Within its bounds twenty additional doctors and ten 
additional lawyers have recently settled. Would medical 
and legal fees thereby be diminished ? On the contrary, that 
city would thereafter have to support two men where one 
was supported before. Many physicians and lawyers are 
opposed to the trades unions of bricklayers and carpenters, 
but they are continually supporting trades unions which 
they call "Medical Societies" and "Bar Associations." 
These trades unions fix the scale of prices at which medi- 
cal and legal services shall be rendered. The result is, that 
there is actually little competition in prices of wages. The 
competition is for employment. Having less employment 
than if there were a smaller number to perform the service, 
there is a greater necessity and temptation to charge the 
highest possible fees. 

What has been said of physicians and lawyers applies to 
many other classes of persons. When society is properly 
organized, measures will be adopted, the tendency of which 
will be to prevent an unnecessary number of middlemen. 
Hereafter this subject will be further discussed. 



CHAPTER IV. 

Indirect Barter.— Trade is Seldom made Purely for Amusement.— Origin 
of Commission Merchants.— Origin of Merchants. — A Merchant's 
Profits are for Information. — Fairs. — When Indirect Barter begins. — 
Foreign Commerce is Barter. — Effect of Destruction of Gold and 
Silver. 

Transfers of property are not made for the mere purpose 
of transfer ; but for the attaimnent of a definite purpose pre- 
existing in the minds of all parties thereto. 

Perhaps it has been shown with sufilicient fullness that 
direct barter is the simplest method of trading, and the one 
which mankind naturally first used. Let us now consider 
the next step in the development of commerce, and to 
make its description more easily understood, return to the 
fortunes of our imaginary colonists. When we left them they 
were very poor, and had just begun to create wealth and 
capital, and to directly exchange things with one another. 
But they are steadily working and practicing economy, and 
in consequence, wealth and capital slowly but surely in- 
crease. Neither time nor labor is spent on wealth which is 
not a means of creating other wealth. 

Thus, directed by imperative necessity, labor as far as 
possible is employed in creating the means whereby wealth 
can more easily be produced. After a time, as a consequence 
of such a course, capital in the form of rude tools begins to 
be abundant, and although these implements are of an in- 
ferior quality, they are nevertheless a great help to the 
naked hands. Labor becomes more ei^cient and produc- 
tive. Food, shelter and clothing are more readily obtained, 
and life becomes easier and its tenure more secure. The 
colonists increase in numbers. They are now provided 
with weapons to defend themselves against wild beasts, and 
there is no longer the same necessity which first existed for 

55 



56 SOCIAL STRUGGLES. 

all congregating within narrow limits for mutual help and 
protection. The country is explored for good locations, 
and emigrants from the first camping-ground settle the best 
sites on the neighboring lands, over a steadily widening 
area. 

As their numbers increase and the distance from one 
man's house to another's, and from one part of the settle- 
ment to another grows greater, meeting each other and 
trading entirely by direct barter becomes more difficult. 
This is so chiefly because a personal knowledge of each 
man's wants, and his capacity to supply other persons' 
wants, becomes less universal. Everybody ceases to know 
everybody. Consequently, every man ceases to know all 
those who want to trade, what things they wish to dispose 
of, and just what things they wish to get in exchange. 

ORIGIN OF COMMISSION MERCHANTS. 

In proportion as this condition of things grows, the need 
of information in regard to each other's desires and abilities 
to make exchanges also grows. The colonists need an 
Industrial Intelligence Office where facts in regard to each 
other's wants can readily be obtained. The events which 
lead to the opening of the first office of this kind are always 
essentially the same ; i. e., circumstances make it either 
convenient or necessary for a third party to intervene be- 
tween the two persons who exchange goods with each 
other. 

A has the skin of a wolf which he wishes to exchange for 
some fish-hooks. B has more fish-hooks than he wants, 
but does not wish to trade for a skin, — he wants to ex- 
change them for an ax. C has a surplus stone ax, but he 
does not want any fish-hooks,- — he wishes to exchange the 
ax for a wolf skin. 

D is a shoemaker who lives in a cabin near the junction 
of several much traveled paths. While D is sitting in 
front of his hut at work, A comes along with his wolf skin, 
and after accosting D, says : " I want to trade this skin for 
its value in fish-hooks, but do not know who has any to 



PROFIT OF COMMERCIAL KNOWLEDGE. cy 

spare. You live here where you see a great many more 
people than I do, and can therefore more easily find out 
who wants to exchange hooks for this skin. I will leave the 
skin here ; you make the exchange, and I will pay you for 
the trouble." D takes the skin and hangs it up in his 
cabin. 

Soon afterward B comes along with a bunch of fish- 
hooks, and after making remarks similar to those made by 
A, he desires D to help him make a trade for an ax. 
Then C walks up to D, and like A and B, he requests D's 
assistance in making an exchange of his ax for a wolf skin. 
Thereupon D trades A's skin for C's ax, and receives a 
small stone hammer from C for his trouble. 

When next D sees B, he gives him the ax received from 
C, takes his fish-hooks in exchange, and receives one fine 
hook for his trouble. 

Finally, A returns, and upon inquiring about the fish- 
hooks is told that they have been obtained in exchange 
for his wolf skin. A takes the hooks and gives D one of 
them for his trouble. 

The desired exchanges have now all been made. Indi- 
rect barter has begun. D has made a profit by trading the 
property of other persons, and has thus become a middle- 
man. In fact, D has received pay for keeping an intelli- 
gence ofifice ; his duties were to get the precise items of in- 
formation which were wanted by A, B and C. 

D now perceives that a profit can be made by acquiring 
industrial information, and having a central location, he 
puts out a sign : " I help people trade by finding out who 
wants to procure what they have got, and who can furnish 
in exchange what they want." This sign is afterward short- 
ened, without changing its meaning, so that it reads : 
''General Commission Merchant." 

ORIGIN OF MERCHANTS. 

After a time D acquires some wealth, and knowing what 
things are commonly wanted and what the people are 
willing to give in exchange for them, he puts his wealth in 



58 



SOCIAL STRUGGLES. 



the form of a supply of what is usually needed. When a 
customer appears who wishes to exchange something in his 
possession for another thing, D has ordinarily that other 
thing on hand, and can make the exchange Avithout the de- 
lay which we have seen occurred in making trades for A, B, 
and C. Besides avoiding the delay, there is another ad- 
vantage to the customers, viz., they can see the things 
which they want, examine their quality, and learn at once 
how the trade is coming out. 

It is no longer a question oi finding z. man who has both 
the desire and ability to exchange certain required things, 
as at first. D has both this knowledge and the required 
goods in his own possession. D then puts out a different 
sign: " Ihelp people trade by keeping on hand the things 
they want to get, by 'always knowing who wants what they 
wish to trade off, and on what terms such an exchange can 
be .made." 

Without changing its meaning, this sign is finally abbre- 
viated so that it reads, " General Merchant." 

D now keeps in his cabin substantially the same medley of 
things which most of us have seen in what is called " a coun- 
try store."" Direct barter between the colonists still goes on, 
but for several reasons a considerable number of persons come 
to trade with D. They do not know who else can supply 
their wants, and at the same time be willing to take pay in 
what they at that moment wish to part with. Even if they 
did know who was both willing and able to make with them 
the exchange desired, it might cost more in time, labor and 
other expense to go where that person lives than it would 
to pay D his profit. 

A merchant's profits are for information. 

In the foregoing sketch the causes, motives and circum- 
stances which have made D at first a commission merchant, 
and afterward a merchant, are, in substance, the identical 
causes and conditions which first started, and have kept in 
motion, a large portion bf the world's commerce. When 
trade is analyzed it appears that salesrooms, stores and shops 



FAIUS CONVEY COMMERCIAL INFORMATION: 59 

are essentially intelligence offices. The most successful 
keeper of one of these offices is the man who practically has 
the most industrial information to sell the public. The mer- 
chant should know what articles his customers want and 
what things they wish to give in exchange for them. He 
should also know who are able and willing to supply the 
goods desired by his customers, and what these persons are 
willing to take in exchange for what they furnish. It is also 
important that the relative value of all the goods he deals in, 
and the cost of their transportation and other expenses of 
placing them in the hands of consumers, should be known to 
the merchant. 

When we go to what is ordinarily called an " Intelligence 
Office," Ave expect to receive special information and to pay 
a fee therefor. We do not usually recognize the fact that 
the charges which a merchant makes for his goods, over and 
above their total cost to him, are, in fact, fees forgiving prac- 
tical information to the buyers of those goods. It some- 
times happens that the merchant exchanges his goods at a 
loss instead of a profit ; he is then suffering from his own 
lack of knowledge in regard to present or prospective values 
when he made the exchange and got the goods which must 
be sold at a loss. 

FAIRS. 

In every age, all peoples and nations have been accustomed 
to gathering together in considerable numbers, at onetime 
and place, for the purpose of getting the information which 
we have seen is so necessary to those who wish to barter one 
thing for another. 

L may have something which he wishes to dispose of in 
exchange for a thing which M owns. M may wish to part 
with that thing in exchange for the precise article which L 
wishes to trade off. But so long as L and M do not know 
these facts, nor how to effect a meeting, an exchange be- 
tween them is impossible. Hence commercial and indus- 
trial knowledge is the necessary forerunner of an exchange. 



6o SOCIAL STRUGGLES. 

The same principle always holds good, no matter whether 
it be between two individuals or between two nations. 

Until the invention of newspapers, fairs and market-places 
were the principal sources of acquiring a knowledge of each 
other's wants. The great fairs of Europe, which for cent- 
uries were such important events to nations, were chiefly 
gatherings of persons who wished to barter directly or indi- 
rectly with each other. Some money was used at these fairs, 
but comparatively little ; the exchanges were chiefly made 
in substance, like those aforesaid between A, B and C. To- 
day the merchant can take up his newspaper and study the 
markets in all quarters of the globe. But market-places 
still remain, and, although far less important than formerly, 
fairs of various kinds for the purpose of disseminating indus- 
trial and commercial information are still frequently held. 
A World's Fair is the latest mode of doing substantially just 
what our colonist shoemaker did- 

WHEN INDIRECT BARTER BEGINS. 

Whenever A and B wish to exchange things with each 
other and for any reason are unable to do so without the in- 
tervention and aid of a third person, indirect barter begins. 
Shippers, merchants, salesmen and other kinds of middle- 
men are part of the machinery whereby the wants of A and 
Bare supplied. The merchants of this country do not have 
facilities for carrying on a direct trade with South America, 
and the merchants of that continent have no means of di- 
rectly trading with us. England has means for carrying on 
a direct trade with South America, and therefore she acts to 
a large extent the part of a middleman between parties who 
would be benefited by directly trading with each other. 

We have now seen that indirect barter differs from direct 
barter only by the fact that it is not conducted by the pro- 
ducers and consumers, but by third parties who charge a fee 
or profit for so doing. We have also seen that this mode of 
trade begins at an early stage of the growth of society. Like 
direct barter, it is not peculiar to an uncivilized state and is 



FOREIGN NATIONS BARTER GOODS. gj 

still employed to a great extent between citizens of the same 
country. 

It maintains its hold on commerce for the same reason 
that direct barter does. Whenever it is cheaper or more 
convenient for men to exchange one thing for another with- 
out the use of money than with money, barter occurs. The 
presence of a third party does not affect the principle which 
makes barter probable. 

FOREIGN COMMERCE IS BARTER. 

An illustration of indirect barter on a large scale is con- 
stantly before us in the trade of this country with foreign 
nations. This vast commerce is carried on entirely by bar- 
ter. Money is not used, for the simple reason that inter- 
national money has yet to be made. Gold and silver are 
used to a small extent to settle balances of accounts. But 
those metals are used simply as commodities, just as copper, 
tin and quicksilver are. A pile of bricks is not a brick 
house, and the material from which money is made is not 
money. We have several times suspended specie payments, 
but this event did not interrupt foreign commerce for a 
single day, — it went on, as before, by barter. 

The international commerce of the world is carried on by 
an indirect barter and not with money. Merchants send 
ships to distant ports laden with various kinds of valuable 
commodities. The ability of the master of such a ship to 
exchange his cargo for valuables on which a profit can be 
made in the home port, does npt depend on his having gold 
or silver to buy them with. No matter what the cargo is, 
provided the foreigners regard its possession more desirable 
than goods which they already have, an exchange is 
readily effected. A ship may be loaded with flour, sugar, 
coffee, or hardware; and it may also carry some gold or- 
silver. But when those metals are exchanged, the trans- 
action is carried on just as if a keg of nails, a bale of cloth, 
or any other valuable thing was being compared with the 
value of some other thing and an exchange is made on the 
basis of the appraisal agreed on. 



62 SOCIAL STRUGGLES. 

EFFECT OF DESTRUCTION OF GOLD AND SILVER. 

The reason of barter between nations, and the use of gold 
and silver in carrying it on, may be illustrated by supposing 
the immediate loss of all the gold and silver in the world. 
Would trade be arrested by such an event ? Not for a day. 
Different nations would still have different productions, and 
therefore an exchange of different goods would be required 
to supply their wants. 

For example, Cuba would continue to raise sugar and 
would also want flour, carriages, hardware and other things 
just as she now does. Nations who do not raise sugar, and 
produce the things which Cuba needs, would have the same 
desire to trade with her they now have. An exchange of 
commodities would therefore be made just as at present. 
The only difference would be in the mode of making change, 
or settling balances when things of unequal value were 
traded. At present, gold and silver are used to a small 
extent for that purpose. If those metals did not exist, some 
other commodity would be so used, and greater pains prob- 
ably taken to trade equal amounts of value so as to avoid 
the necessity of " change." The use of those metals even 
as commodities is therefore not a necessity of commerce, 
but often a convenience. 

In the foregoing sketches of direct and indirect barter, 
reference to the use of money has been avoided as far as 
possible, in order to give the reader a clear idea of the 
mechanism of exchanges in which money is not employed. 

We have seen that the ultimate object of human industry 
and effort is to supply wants and gratify desires, — that ex- 
changes are made directly or indirectly for those purposes, 
and that the methods of making exchanges, and the means 
employed in conducting them, are all subordinate to this 
desired end. Having considered exchanges by barter with- 
out money, let us now dissect exchanges in which money is 
used and find out why we use it. 



CHAPTER V. 

Money. — Trade through a Third Person. — Trade through a Third 
Thing. — Ancient Kinds of Money. — The pecuHar Use of Money.- — 
Mechanism of Trading through the Medium of a Third Thing. — 
What Commerce is and how it Developed. — Difference between Bar- 
ter and Exchange with Money. — Definition of the word " Money." 
— A Common but False Idea.— Some Debts can only be Paid with 
Coin. — The same Thing may have several Definitions. — Why Barter 
is often Impracticable. — Origin of the Use of Money. — Legal Tender 
Laws. — Effect of a Change in Value of the Legal Tender. — Legal 
Tender Laws Increase Value. — Development of Money. — A Poor 
Old Thing is Preferred to a Good New Thing. — What we can Rea- 
sonably Expect. — Bankers and Money. — An Irresistible Movement. 

A full knozvledge of the functions of money is possible only 
to those who clearly understand hozv trade is conducted with- 
out its use. 

We have found that direct barter was the first mode em- 
ployed by mankind to trade with each other. It has further 
appeared that circumstances often render it inconvenient or 
impracticable for mankind to trade with each other by direct 
barter. 

We have also found that the second natural step in the 
progress of commerce is indirect barter: i.e., to make ex- 
changes through the medium of a third person. This brings 
us to the third commercial stage, which is the making of 
exchanges through the medium of a third tiling. 

These three ways of trading may be stated thus : 

Simple Barter : Two persons trade one thing for another, directly. 
^ ,. ^ Tj e j Two persons trade one thing for another, through 
indirect Barter : | ^^^ medium of a third person. 

r Two persons trade one thing for another, through the 
Money or pur- J medium of a third thing ; and, generally at the same 
chase and sale ; j time, also trade through the medium of a third per- 
[^ son as well as a third thing. 

63 



64 



SOCIAL STRUGGLES. 



TRADE THROUGH A THIRD PERSON. 



To make the difference between these various ways of 
making exchanges as simple as possible, we will use an illus- 
tration. 

F has a house and lot which he wishes to exchange for a 
ten-acre field owned by G. If F go in person to G and 
exchanges his house for G's field, that is direct barter. 

If G refuse to trade directly with F, and then F employs 
a real estate broker, who, by various arguments, persuades 
G to exchange his field for F's house, that is indirect bar- 
ter, — an exchange through the medium of a third person : 
to wit, the real estate broker. 

TRADE THROUGH A THIRD THING. 

Let us next suppose that F learns that G will not ex- 
change his field for anything but its value in cows and oxen. 
Thereupon F exchanges his house for some cows and oxen, 
drives them to G's house and exchanges them for his field. 
This is a purchase and sale by the use of money. The 
cows and oxen are money, the third thing through which 
the trade was made. 

The reader will observe that this exchange of cattle for 
G's field differs in one important respect from a case in 
which a neighboring farmer should have more cattle and 
less land than he wanted, and therefore should exchange 
some cattle for a field. That would be barter. But F 
exchanged his house for the cattle with the express pur- 
pose of temporarily obtaining a medium whereby his house 
could be changed into a field. G accepted the medium, 
and therefore the cattle were money. In effect, F melted 
his house down and ran it first into the mold of oxen and 
cows ; then he melted the cattle and ran them into the 
mold of a field. 

ANCIENT KINDS OF MONEY. 

As cows, oxen and other domestic animals have been used 
as money for thousands of years, F has not been an inno- 



TRADE THROUGH A THIRD THING. 



65 



vator in doing as he has. The wealth of a person was for- 
merly computed and stated in this kind of money. The 
Bible does not inform us how many thousand pounds, or 
dollars, Job was worth, but it says : 

" His substance also was seven thousand sheep, and three thousand 
camels, and five hundred yoke of oxen, and five hundred she-asses, and 
a very great household ; so that this man was the greatest of all the men 
of the East." 

In England,, for a long time, cattle were the medium of 
exchange ; and the laws provided severe penalties against 
those who mutilated cattle, — not simply because private 
property was thereby injured, but because of the additional 
crime of injuring the public money. These enactments 
were similar to those now on our statute books against 
clipping coins. It is only about two hundred years since 
cattle were a legal-tender money in this country. 

THE PECULIAR USE OF MONEY. 

Money has several different uses. It is used for exchang- 
ing, comparing, computing, dividing, storing, and transport- 
ing values. But the peculiar and essential function and 
use of money is to help mankind make exchanges and com- 
pare the value of one thing with that of another. How 
money can take the place of a third person ; how an ex- 
change of two things can be made by converting one or 
both of them into a third article, and then exchanging this 
third article for the desired object ; and how money is used 
as a help and guide in comparing values, must be clearly 
understood before any definite conception of the various 
currency problems is possible. At the risk of being tedi- 
ous, I will therefore use further illustrations as an aid to 
the reader in thinking these matters slowly over. 

MECHANISM OF TRADING THROUGH THE MEDIUM OF A 
THIRD THING. 

A farmer wishing to get a pair of shoes, goes to the work- 
room of a shoemaker, and seeing a pair to his liking, asks 
their owner if he does not wish to make an exchange and 

5 



66 SOCIAL STRUGGLES. 

take some farm products for his shoes. A conversation 
ensues, in which it transpires that the shoemaker wants 
three sheep skins to give the tanner for some leather. 
Therefore the shoemaker offers to trade his shoes for sheep- 
skins. The farmer has no sheep skins. He then goes 
home, and knowing that his neighbor S has sheep skins to 
spare, he goes to his house and tells him that a certain shoe- 
maker has a pair of shoes which can only be got by a man 
having three sheep skins to give in exchange. The farmer 
then inquires if S will not take the skins to the shoemaker 
and get the shoes, and concludes by saying that after that is 
done he will trade with S for the shoes. S replies to the 
farmer by saying that as the shoemaker wants to see a 
third thing, instead of a third person, it is unnecessary for 
S to take the skins to the shoemaker. Whereupon the 
farmer barters a pig for the sheep skins, takes them to the 
shoemaker and trades them for the shoes. After getting 
the skins, the shoemaker exchanges them with a tanner for 
some leather. 

The farmer has now exchanged a pig for a pair of shoes *> 
that is, the shoes are the final result of his trading off the 
pig. The skins were the third thing which served as a 
medium of exchange. The skins were money. They were 
the temporary form into which the farmer changed his pig, 
and the shoemaker changed his shoes. When this form 
was finally changed, the farmer had his shoes and the shoe- 
maker had his leather. 

The reader will observe how the money helped the differ- 
ent parties to this trade to compare values. When the far- 
mer gave his pig for skins, he knew that they would buy the 
shoes ; therefore the exchange was merely a mode of com- 
paring the pig with the shoes. It was, in substance, the 
same as if the pig had been put in one side of the scales, and 
the skins, labeled : " These are equivalent to a pair of shoes," 
put in the other side. In like manner the shoemaker, when 
he gave the shoes for the skins, virtually gave the shoes for 
the leather, thus comparing the shoes with the leather and 
adjudging them to be of equal value. 



DEVELOPMENT OF COMMERCE. 



67 



It should steadily be remembered that all comparisons of 
value are an exercise of the judgment. By using money, in 
many cases, it becomes easier to compare the value of one 
thing with another, because we thus simplify the matter, and 
steady our judgments by diminishing the number of things 
to be borne in mind at one time. Thus in the last foregoing 
case, when the farmer bartered his pig for the skins, they 
really shortened the distance between the pig and the shoes, 
because the farmer knew that the effect was the same as 
if he were comparing his pig directly with the shoes. 

Here, too, by using skins as money, no new thing has been 
done, as the skins of animals from time immemorial have 
been used as money. In some localities skins are still cur- 
rent money. 

The reader will here observe that we are not now consid- 
ering what is the best kind of money, but are merely speak- 
ing of the uses of money, using the term "money" in a 
general sense. No one can intelligently talk about the 
"best kind" of plows until he knows just what a plow is, 
what object is accomplished by it, how it is used and why 
it is used. In like manner, before the relative merits of dif- 
ferent kinds of money can be considered, what money is 
used for, and hozv and ivhy we use it must be understood. 

WHAT COMMERCE IS AND HOW IT DEVELOPED. 

The trade of the world appears a very complex matter. 
But in reality it is all nothing but a multiplication of three 
things. First, a trade directly between A and B. Second, 
a trade between A and B through the medium of a third 
party, C. Third, a trade between A and B through the 
medium of a third thing, called money. 

The art of commerce, like the great majority of other arts, 
has developed very slowly through a long period of time. 
Many things which now appear very simple were only 
learned by the united efforts of a multitude of minds acting 
for century after century. The primitive idea of using 
something as a medium of trade, appears to have beAi to 
compare a third thing with one of two objects sought to be 



68 SOCIAL STRUGGLES. 

exchanged, and if this third thing were judged to be of the 
same value as one of the things to be traded for something 
else, then to use this third thing as money, with little refer- 
ence to any other consideration than its presumed equality 
of value with a certain other thing. The fact that this 
money was bulky, or undesirable in other respects, was sub- 
ordinated to the central idea of obtaining an equality of 
value. After a long time, by successive and painful steps, 
mankind discovered that it was both desirable and practica- 
ble to have money that was divisible, compact, portable and 
imperishable. This led to the use of iron, copper, tin, 
silver and gold as money. Lastly, it has been learned that 
representatives of value can be used in making exchanges 
just as effectively, and far more cheaply, than the ancient 
kinds of money. To us who are accustomed to using rep- 
resentatives of value, and to seeing large amounts of proper- 
ty transferred from one man to another by the transfer of a 
few small pieces of paper called checks or drafts, it is some- 
what difficult to think of the payment of a dozen oxen, or a 
thousand bushels of corn, as a money transaction. We are 
apt to think of it as barter. 

DIFFERENCE BETWEEN BARTER AND EXCHANGE WITH 

MONEY. 

The character of an act does not depend on the kind of 
instruments used in performing it. Murder may be com- 
mitted either with a gun or a bread-knife. The character of 
an act depends on the circumstances under which it is com- 
mitted, — on the thoughts which directed a certain course of 
conduct. 

In like manner the principles involved in a trade do not 
depend on what is exchanged. Whether a certain transfer 
of property is a barter or a money transaction, depends on 
the manner in which the thing or things which effect it is 
used. Therefore the essence of a bargain in which a sack of 
salt, a dozen beaver skins, a wheelbarrow full of copper dol- 
lars, oi a yoke of oxen is used as an aid in comparing values, 
and as a medium of exchange, is precisely the same as the 



MUTUAL CONSENT MAKES A THING MONEY. 



69 



essence of a trade in which gold or silver coins, or legal-ten- 
der paper notes are used as a medium of exchange. 

For example : a roof is the cover to a building. It may- 
be nearly flat or very steep ; it may be composed of wood, 
metal, or other substances; but no matter what its form or 
material, if it perform the essential function of covering a 
building, it is a roof. It is not the material nor shape, but 
the purpose and intent which it carries out which deter- 
mines its definition. A thing is bartered when it is ex- 
changed without being used as a third thing. 

DEFINITION OF THE WORD " MONEY." 

If the foregoing have been carefully read and thought 
over, the definition of the word " money " is already in the 
reader's mind. 

Whatever two persons agree shall be transferred from 
one to the other as a medium of exchange, and as an aid in 
comparing and computing values, is money in the full 
sense of the term, as between those two persons. 

Whatever an entire community agree shall be transferred 
from one person to another as an aid in comparing and 
computing values, and as a medium of exchange, is money 
in the full sense of the term, in that community. 

Whatever a nation consents to transfer from one person 
to another as an aid in comparing and computing values 
and as a medium of exchange, is money in the full sense of 
the term, in that nation. 

The aforesaid definitions explain how a thing can be 
money in one part of a country, and not be money in 
another portion of the same country. This was exempli- 
fied on a large scale in the United States during, and for 
several years after, the civil war. Greenbacks were then 
money in the Northern States, but in California they were 
generally merely a commodity, simply because the citizens 
of that State did not agree to receive and use them as 
money. During the war, by agreement of the people, Con- 
federate notes were money in the territory held by the 
Confederate armies. But in the Northern States the peo- 



70 



SOCIAL STRUGGLES. 



pie did not agree to use those notes, and therefore they 
were not money in the North. 

The distinctions in the aforesaid definitions also show 
why things which pass freely as money in one nation, cease 
to be money as soon as they pass the frontiers. Mankind 
have not yet emerged from barbarism and ignorance sufifi-p 
ciently to render possible the creation of money which 
shall pass current and unchallenged in any quarter or sec- 
tion of the globe. But it seems as if there ought to be in- 
telligence and morality enough in a few of the leading na- 
tions to enable their governments to create an interna- 
tional money, as between the citizens of those nations. 

A COMMON BUT- FALSE IDEA. 

Let us here interrupt our discussion of the uses of money 
long enough to consider a statement which is commonly 
supposed to be highly " scientific." This idea is that, 
" nothing is money but gold and silver coins." 

As Lincoln used to say, this reminds me of a story. A 
man went to a lawyer, and after stating his case inquired : 
"Can a man sue me for doing thus and so?" The reply 
was : "Certainly not." The lawyer was then asked: " But 
if he should sue me, could he recover judgment?" The 
answer was : " No, he could not — he would have no right 
to sue you, and therefore could not get judgment." The 
inquiry was then made : " But, if he should sue me and 
get judgment, could execution be issued and the judgment 
collected?" To this the answer was : " Oh, no ! Such a 
judgment would have no validity, and could not be col- 
lected." Whereupon the client burst out: "What non- 
sense ! You tell me it cannot be done, but I tell you it has 
been done. I have been sued, judgment against me has 
been given, and, worst of all, the sheriflf has collected it." 

In like manner, a plain man can say to the self-styled 
scientist : " A great number of things besides gold and silver 
have been money for thousands of years, and enormous 
amounts of property have been bought and sold with them 
to the satisfaction of all parties. Why, then, say that it 



COMMON SENSE IS USEFUL. 7 1 

is impossible to do what we all know has been done so 
often and for so long a time ? " 

Much mental confusion has arisen in consequence of not 
distinguishing the difference between money and the ma- 
terial from which it is manufactured, and of which it con- 
sists. This comes from the prevalent mistake of not test- 
ing money by the same rules we apply to everything else. 
All other things we name by tvJiat they actually are and 
not by what they happen to be made of. 

For example : we usually apply the term " house " to a 
shelter and home for human beings. A home and shelter 
for human beings is therefore a house, no matter what its 
size, nor of what material it is composed. It may be made 
of a great variety of materials, but it has the same name, 
and in essence is the same thing, when built of rough logs 
as when made of the finest hewn marble. Houses are fre- 
quently built of wood, but a pile of Avood is not therefore 
a house. In these respects, what is true of houses is true 
of money. Money is frequently made of gold and silver, 
but a lump of gold or silver is not therefore money. Those 
who say that nothing is money unless made of those metals 
might, with the same propriety, say that nothing was a 
house unless built of hewn stone. Money can be made of 
a great variety of materials, just as houses can. The test 
as to what constitutes a house is the object and purpose 
effected by a building, viz., furnishing a home and shelter 
for human beings. The test as to what constitutes money 
is the special object and purpose which a certain thing gen- 
erally effects, viz., the transfer of property and the payment 
of debts by being passed from hand to hand without in- 
dorsement or other formality as a medium of exchange, and 
a help in comparing the value of one thing with that of 
another. 

If paper money be not money, then the United States 
carried on a vast war for four years, and transacted an 
enormous domestic commerce for sixteen years, almost en- 
tirely without money. England also carried on business 



72 



SOCIAL STRUGGLES. 



from 1797 fo^ about twenty years almost entirely without 
money. 

The false notion that nothing but gold and silver coins 
are money naturally leads its believers into the error of 
supposing that valuable things of various kinds cannot 
really be bought, sold and paid for, without using those 
coins. Furthermore, such persons tell us that debts can- 
not be paid without gold and silver coins. But the simple 
fact is that mankind bought and sold valuable property of 
various kinds for centuries before coins were invented. In 
recent times, countless millions of debts have been paid to 
the satisfaction of all parties without using gold or silver in 
any form. Furthermore, payment of debts without the 
use of any money is constantly taking place. The large 
debts continually being paid by the merchants and bankers 
of one country to the merchants and bankers of foreign 
countries are canceled without using money at all. Pay- 
ment is madQ with various commodities. Of these com- 
modities the raw material from which much money is made 
— viz., gold and silver bullion — forms comparatively a very 
small portion. 

SOME DEBTS CAN ONLY BE PAID WITH COIN. 

The error of supposing that debts cannot be paid unless 
gold or silver coins are given and received, has probably 
arisen from not noting the distinction between an ordinary 
debt and a specific contract. When a man specifically 
agrees to deliver as payment of a debt a thousand bushels 
of wheat, a thousand silver dollars, or any other definite 
and specified thing or things, he can properly discharge 
that obligation only by paying the exact thing, or things, 
named in the contract. But the vast majority of debts are 
not specific contracts. This is illustrated by the different 
kinds of United States bonds. The major part of those 
bonds are payable "in coin of the standard value of the 
United States on the 14th day of July, 1870." This is a 
specific contract, because certain things are defined which 
can, and must, be given in payment; to wit, a silver dollar, 



HO W DEB rs ARE PA YABLE. >j-y 

nine-tenths fine, weighing 412^^ grains, or a gold dollar, 
nine-tenths fine, weighing 25 8-10 grains. Tlie United 
States have the right to choose whether they will pay in one 
or the other of the said coins. But beyond the choice be- 
tween a silver or a gold dollar, they have rightfully no 
choice. Unless the creditor agree to receive it, they can- 
not pay in legal-tender paper of any kind whatsoever with- 
out breaking their contract. Hence all bonds issued by 
virtue of said act should be paid as agreed,— -in coin of the 
standard value of the date referred to. 

But a portion of our Government bonds are payable in 
" lawful money." These are called the " currency bonds." 
Payment of these can be made in whatever is legal-tender 
money when they fall due. Therefore the currency bonds 
are not specific contracts, because there is no definite speci- 
fication beyond the requirement that the money paid shall 
have a legal-tender quality. 

All obligations in which the agreement is that a certain 
number of dollars shall be paid at a given time, without 
any specification in regard to what those dollars shall con- 
sist of, are payable in whatever dollars are legal tender 
when the debt falls due. This is so, simply because both 
parties to the contract have therein agreed to give and 
receive such dollars as money ; and, whatever a debtor and 
creditor agree to use as money, is thereby converted into 
money, as between those two persons. 

THE SAME THING MAY HAVE SEVERAL DEFINITIONS. 

Many definitions depend, not on the qualities of the 
thing itself, but on the manner in which that thing is used. 
Thus, a stick three feet long, and an inch in diameter, is a 
staff if used as a support, a club if used for striking a blow, 
and a yard-stick if used for measuring length. No matter 
what definition may ordinarily be attached to a thing, 
whenever it is used as a medium of exchange and as a help 
in comparing and computing values, it is then properly de- 
fined as MONEY. 

Hoping that the definition of money has been made sufifi- 



74 



SOCIAL STRUGGLES. 



ciently explicit, we will now resume consideration of its 
uses. 

WHY BARTER IS OFTEN IMPRACTICABLE. 

Theoretically, there are no obstacles to carrying on all 
trade entirely by barter. For every man who wants to give 
a certain thing in exchange, there is always a person who 
wants to receive that certain thing in exchange. Why then 
not promote the meeting of those two persons, in order 
that they may barter and save the cost of money ? There 
are several answers to this question. One of them is the 
practical difficulty which frequently occurs of effecting a 
meeting between two persons whose commercial desires are 
exactly opposite ; viz., A wants precisely the thing which 
B wishes to dispose of; and B desires just what A wants 
to give in exchange. For example : a farmer needs a tooth 
drawn, and wishes to give in exchange for the desired ser- 
vice a bushel of turnips. In this case the farmer's desire is 
to receive a definite service, and to give a bushel of turnips. 
If he should find a man competent and willing to give the 
required service and receive the turnips in exchange, then 
the trade could be completed without the use of money. 
But while there is no doubt of the existence of a person 
skilled in drawing teeth who wishes turnips for his pay, the 
farmer might have to suffer toothache for some time, if he 
waited until such a man were found. 

Money is used because a man who will work for money is 
more easily found than one who will take pay in turnips. 

At first sight a combination of precisely opposite wants 
in two persons appears easy to find. But in fact it is often 
impracticable. When the kinds of labor and the number 
of articles of commerce were very few and simple, it was an 
easy matter for a man to find his commercial opposite. 
But the steady growth of a great diversity of employments, 
and the creation of a multitude of different things, have 
produced such numerous and complex desires, and real and 
fancied wants, that it is yearly becoming more and more 
difficult to supply those desires and wants by barter. 



ffOJV MONEY HELPS EXCHANGES. 



75 



Money is therefore used as a means whereby one man's de- 
sire to give in exchange is converted into an ability to 
give in exchange just what the man wants with whom a 
trade is desired. How money is employed to transform a 
desire to trade \n\\.\\o\x\. the ability into a combined desire to 
trade and an ability to do so, let us show by an example. 

Suppose the last-mentioned farmer had gone to several 
dentists and found them all unwilling to take turnips in 
pay for drawing his tooth. Finally, he goes to a dentist 
who also refuses to work for turnips, but incidentally says 
that he would take some fresh eggs in payment for his ser- 
vices. Whereupon the farmer goes to a market-place and 
sells his turnips for some fresh eggs. He then takes the 
eggs to the dentist and completes the bargain. 

In this case, the principle involved is precisely the same 
as if the farmer had exchanged his turnips for a silver coin 
instead of eggs. The eggs were money. They acted as a 
medium of exchange by making a coincidence between the 
thoughts of the farmer and the desires of the dentist , that 
is, the eggs made the farmer and the dentist think alike. 
After the farmer got the eggs he had the ability to give 
just what the dentist wished to receive. 

As eggs have been used to a considerable extent as 
money, nothing new is presented in the foregoing example. 
The reader will here carefully observe that the obstacle to 
a trade between the farmer and the dentist was removed 
by making the commercial wants of one man precisely the 
opposite of those of the other. Their wants then resem- 
bled a mortise and a tenon, — one fitted the other. This 
was effected by the farmer exchanging turnips for eggs. 
Turnips are a useful commodity, wanted by a considerable 
number of persons, but they are not nearly as generally de- 
sired as fresh eggs are. The completion of the bargain be- 
tween the farmer and the dentist was therefore brought 
about by one of the parties to the transaction first changing 
his ownership of a thing which is wanted by comparatively 
few persons, into the ownership of a thing more generally 
wanted. 



76 



SOCIAL STRUGGLES. 



ORIGIN OF THE USE OF MONEY. 



As we have reason to suppose that the natural laws now 
in force have always operated on the human race, the fore- 
going train of events shed light on the origin and continued 
use of money. Sometime in the misty past, our ancestors 
discovered that some articles were more universally wanted 
than others. They next observed that a man who pos- 
sessed an article which was generally wanted could more 
easily make exchanges and supply his wants than a man 
who owned a thing which was not generally wanted. It 
was then found that a man owning a thing desired by a 
comparatively small number of persons, by directly or indi- 
rectly trading with one of that small number of persons 
could exchange that thing for something wanted by a large 
number of persons. It was next noticed that the attention 
of mankind was gradually becoming directed to the advan- 
tage of owning things which were generally wanted, and. 
that this fact made such things more sought after, and con- 
sequently more valuable. Finally, long continued experi- 
ence taught the whole community that certain desirable 
things could always safely be taken in exchange for what 
was disposed of, simply because those desirable things 
could readily be used for making another exchange. 

Those desirable things were thus converted into money 
by being generally used as a medium of exchange. Before 
the discovery that ships could sail from Europe to the In- 
dias by passing around the Cape of Good Hope, pepper was 
brought from India to Europe over land on beasts of bur- 
den. As pepper was difficult to obtain, and much used, 
it was considered a very desirable thing to own, and was 
therefore generally wanted. It had the advantage of be- 
ing portable, comparatively imperishable and easily di- 
vided into parcels of different size and value. Conse- 
quently, pepper was used to a considerable extent as 
money for a long time. 

Mankind undoubtedly existed a long time before the 
metals were used for any purpose whatever. After the art 



DEBTS AND LEGAL TENDER. 77 

of working metals was learned, their service for both utility 
and ornament created a demand for them until finally they 
became generally wanted. After the fact that they were 
generally deemed desirable was fully established, only one 
more step was needed to convert them into money. Iron, 
copper, tin, silver and gold have thus all passed through the 
various stages of discovery ; a test of value for ornament, or 
use ; a growth of demand until generally wanted ; and 
finally, a conversion into money. 

LEGAL-TENDER LAWS. 

Whenever a thing, by habitual use, is adopted by a peo- 
ple as money, one more step takes place as that people ad- 
vances in civilization. That is, the enactment of a law 
making the use of a thing which was previously voluntarily 
used by most persons, compulsory to all in some cases. 
Such is a legal-tender law. It defines what shall be money 
and compels all persons who owe value to pay it in a certain 
thing, which the creditor is also compelled to receive. 

A legal-tender law does not directly compel a man to sell his 
goods for what is declared a legal tender. It merely compels 
him, after having so sold them, to receive the specified legal 
tender in full payment of his claim. But this fact sometimes 
has a powerful influence in determining whether an owner of 
certain goods will sell them or not. If he decide to sell 
them, the practical operation of, the legal-tender law is to 
influence the price which will be asked for the goods. 

Making a thing a legal tender changes its status relative 
to other things in one important respect, — a quality is 
thereby conferred on it not possessed by other things; viz., 
a debt-paying power at a specified price. Any valuable thing 
can be used in payment of a debt, provided the creditor 
will accept it at a satisfactory price to the debtor. But a 
legal tender, for the purpose of paying debts, has a fixed 
price at which it must be paid by the debtor and received 
by the creditor. Thus, at present in this country the legal 
price of 25 8-10 grs. of standard gold is one dollar, and the 
legal price of 412^ grs. of standard silver is one dollar. In 



78 



SOCIAL STRUGGLES. 



1870, the raw materials from which these two kinds of 
dollars are made were about equal in value. The gold 
dollar has a far greater value now than it then had ; but, 
for debt-paying, it is still only one dollar. The silver dollar 
has not advanced in value as much as the gold dollar ; but 
it too has a greater value than it had in 1870. But the 
fact that the silver dollar is worth more to-day than either 
the silver or the gold dollar was in 1870 does not make it 
any more efficient in paying debts, — it is still only one 
dollar. For all other purposes than paying old debts both 
the gold and the silver dollar are far more valuable now 
than fifteen years ago. 

EFFECT OF A CHANGE IN VALUE OF THE LEGAL TENDER. 

The evidence of this is the fact that more property of all 
kinds can be bought with them now than then. Conse- 
quently more property must be given nozv to get possession 
of them, and therefore their rise in value makes it harder 
for the debtor, and increases the wealth of the creditor. 
When paid, the creditor gets the same number of dollars 
originally agreed on, but each one of them is worth more 
than formerly, and the debtor is bound by the legal-tender 
law to pay, not simply the amount of value received when 
the debt was created, but the NUMBER of dollars called for 
in the legal-tender money. 

The aforesaid considerations show why affixing a legal- 
tender quality to a thing gives it one positive and fixed use 
and value not before possessed. When the legal-tender 
quality is spread over a great number and amount of things 
— as when wheat, corn and cattle are made legal tender — the 
value of each one of those things is not appreciably raised 
thereby. But when the debt-paying power is limited to 
articles small in number and amount, as in case of making 
gold and silver sole legal tenders, it then has a great influ- 
ence in raising their value. The value of those metals com- 
pared Avith all the other property in the world is very 
small. Furthermore, their total value is very small com- 
pared with the total amount of debt existing in the world. 



INCREASED DEMAND INCREASES VALUE. yg 

Making a law which compels the payment of all debts in 
gold and silver, therefore, enormously increases the use, the 
demand for, and the consequent value of, those metals. 

In the first place, a great demand for them arises for 
coinage purposes. Secondly, the use of a metal for mak- 
ing legal-tender money affects its value for other purposes 
besides the scarcity occasioned by its coinage. An un- 
coined metal, which when coined is a legal tender, has at 
all times a royal prerogative over other metals and other 
kinds of property. It is the debt-paying metal, the repre- 
sentative of wealth and the symbol of pecuniary resources. 
When used in the arts, or for ornament, it is not simply a 
valuable metal — it betokens that the owner is rich enough 
to melt a part of his money, and use it where cheaper mate- 
rial is commonly employed. 

Remove the legal-tender quality from a metal to which 
it was once attached, and not only is its use for coinage de- 
stroyed, but, in other respects, its value is impaired. Its 
prestige is gone ; it is no longer a royal metal with powers 
beyond others ; and as a result of this, when used in the 
arts it does not supply the requirements of those who wish 
to make a luxurious display of their wealth. Silver plate is 
not as highly esteemed as when silver was a full legal 
tender. Thus we see that the value of gold and silver, to a 
considerable extent, is created by selecting them as the ma- 
terials from which to make legal-tender money. 

We have now considered how money facilitates exchanges, 
by first helping one man to get just what the man with 
whom he wishes to trade wants to receive. The examples 
recently given may seem very simple, but the student must 
remember that these very plain things are the key to what 
are usually called " obscure questions." Let us carefully 
clear away the underbrush so that we can more easily chop 
the large trees. A clear grasp of simple elementary princi- 
ples makes a person master of the " difficulties " of finance. 



8o SOCIAL STRUGGLES. 



DEVELOPMENT OF MONEY. 



Perhaps the use of money can be better understood by 
considering the order in which different kinds of money 
have been invented and adopted by mankind ; and, after 
being used a long time, have slowly become obsolete in a 
succession the reverse of that by which they were first em- 
ployed. 

We have seen that various articles have come into use as 
money because experience taught mankind that they were 
generally wanted ; and that this demand arose from an ac- 
quired belief that such articles were uncommonly desirable 
and valuable. Furthermore, we have seen that the primi- 
tive idea of a medium of exchange was something valuable 
and generally wanted, with little reference to other desir- 
able qualities which should be possessed by money. The 
value of grain, oxen, bales of wool, slaves and other incon- 
venient kinds of money was not estimated simply by 
their utility as a medium of exchange, but by their 
usefulness for other purposes. After a long time, the idea 
dawned upon our forefathers that money should possess 
other desirable qualities in addition to those aforesaid. 
This led to the use of copper, iron, tin, silver and gold, in 
form of dust, or rough pieces for money. After the metals 
had thus been used as money for a long time, another 
idea occurred to our astute fathers, viz., the idea of melt- 
ing the metals into pieces of convenient size for counting 
and handling. These were used a long time, and then an- 
other idea appeared, viz., that of stamping or marking the 
pieces so that their relative value could more readily be 
estimated. Still another lapse of time was necessary be- 
fore metals were converted into rude coins with an image 
and superscription thereon. After another long period, the 
mechanic arts were developed sufficiently to render possible 
the creation of the beautiful coins of the present day. 

After the metals had been converted into coins bearing 
the stamp of the sovereign power, mankind discovered that 
pieces of paper, as representatives of coin, could be used as 



GROWTH OF MONEY. gj 

money more conveniently than the coins themselves. Be- 
sides a multitude of lesser details, the present form of 
bank-notes has passed through three distinct periods of 
growth. The first idea appears to have been to deposit 
valuables in a bank for safe keeping, and to have their 
value ascertained and registered in a book kept at the 
bank. The owner of these valuables then had a bank credit 
which he used as money by transferring it, with consider- 
able formality, to another person. Next, a certificate was 
given to the depositor, payable only to him or his carefully 
authenticated heirs, successors or assigns. Then one step 
more was taken by issuing certificates, payable to bearer 
without indorsement or other formality. 

Finally, after all the foregoing stages of the development 
of money had been wrought out, despite the clinging of our 
race to traditional ideas, habits and prejudices, appears the 
crowning triumph of common sense applied to finance, — ■ 
legal-tender paper money, dif^cult to counterfeit and lim- 
ited in amount. 

The teachings of history in regard to the growth of finan- 
cial ideas are conclusively verified by the fact that in differ- 
ent quarters of the globe all the aforesaid stages of devel- 
opment exist to-day. Every portion of the financial prog- 
ress through which we have passed is now substantially 
typified by the commercial thoughts and habits of some 
nation or tribe. 

Even within the limits of the United States, nearly all 
the aforesaid stages of the development of a uniform tend- 
ency to make exchanges in the easiest way, and a growth of 
knowledge that convenient money is just as good as incon- 
venient money, are exemplified by money now in use. We 
have the greenback as the most desirable kind of money. 
Next lower in the scale stands the national bank-note as the 
type of representative paper money. The era of beautiful 
coins of metal is shown by our gold, silver and nickel coins. 
The era of cumbrous, inconvenient coins is symbolized by 
the few old-fashioned copper cents which still remain in cir- 
culation. The use of bars of bullion as money recalls 
6 



82 SOCIAL STRUGGLES. 

another age. The employment of gold dust and nuggets of 
gold as money reminds us of a still more primitive epoch of 
human history. Finally, the earliest kinds of money are lit- 
erally exhibited by those Indians who still use skins, ponies 
and kindred things as money. 

Usually, the monetary ideas of a community or nation 
are a correct index of their intellectual growth and culture 
in all other respects. This is significantly shown by the 
conduct of the emigrants who land at Castle Garden. 
Just in proportion to their ignorance, those persons eagerly 
desire heavy and inconvenient metallic money in prefer- 
ence to national bank-notes or greenbacks. 

An improved form of money is adopted by a nation only 
when a considerable portion of its people become suflfi- 
ciently intelligent to appreciate it. Money must be 
adapted to the mental stature of those who use it ; hence 
no sudden change from an inferior to a superior kind of 
money is ordinarily possible, because the growth of mone- 
tary ideas is simply a reflection of the progress of public in- 
telligence in all other respects. A long forward stride was 
taken by this country when greenbacks and national bank- 
notes superseded State bank-notes. But in reality, this 
was not an exception to the aforesaid general law. For a 
long time the American people had suffered great losses 
and inconvenience from State banks, and thus had grad- 
ually been prepared to welcome a uniform national cur- 
rency. Notwithstanding this, national paper money was 
strenuously resisted by capitalists, and its speedy introduc- 
tion was only accomplished by the pressure and exigencies 
of a terrific civil war. 

A POOR OLD THING IS PREFERRED TO A GOOD 
NEW THING. 

The proclivity of mankind to prefer an old inferior article 
to a new superior one, and the wonderful vitality of a 
human habit which has once been fully established, are 
illustrated in nothing more strikingly than in their conduct 
in regard to money. In all ages and countries, every im- 



LOVE OF FAMILIAR FACES. 



83 



provement in money has been obstinately resisted by the 
great majority. The old kind of money was better under- 
stood, and therefore was preferred to the new. When a 
new form of money was invented, it merely added at first 
another name to the list of moneys in use ; the old kinds 
of money were not superseded, but continued in use side by 
side with the new money. From the time when the first 
improvement in money was made, down to the present, 
the same process has been going on. Several kinds of 
money have been simultaneously in use; the best kind of 
money very slowly gaining ground, and the inferior kinds of 
money slowly passing out of use. What was at first a 
monetary innovation, looked on with distrust, in course of 
time became an old kind of money endeared to the people 
by long familiarity. The choice of the people then lay, not 
between a new and an old kind of money, but between two 
old kinds of money, — the elder of the two inferior to the 
other. Then a new form of money appeared, destined to 
pass through the same gradual process of adoption as its 
predecessors. Meanwhile, the primitive kind of money had 
slowly fallen into disuse by reason of an increased employ- 
ment of the second kind of money. In like manner, the 
second kind of money slowly faded out of use because the 
third kind of money was gradually taking the first place in 
the estimation of mankind.* 

Step after step the aforesaid processes have gone on, cent- 

* The foregoing sketch of the history of money is not, and is not in- 
tended to be, chronologically correct. It simply shows the successive 
steps by which monetary knowledge has developed, when viewed from 
its lowest stage to its highest, without any reference to what took place 
in the intervening periods of time. Financial, like all other kinds of 
knowledge, has followed a line of alternate progress and recession. The 
fact that the value of a unit of money, as money, depends on the number 
of those units in circulation and not on the materials of which it is made, 
was known and acted on thousands of years ago by the foremost nations 
of the world. But this fundamental principle has repeatedly been lost 
sight of, and the result has followed which inevitably flows from the adop- 
tion of false premises ; viz., a confused and erroneous mode of reasoning 
and action. 



84 SOCIAL STRUGGLES. 

ury after century, until the financial ideas of the world have 
reached their present form. How very slo^vly and imper- 
ceptibly we have traveled is shown by the fact that all the 
gradations of money, from the primitive up to the highest 
form, are in use to-day. Moreover, the highest form of 
money now in use is much smaller in amount than that of 
other and inferior kinds of money. 

The past reflects inversely the image of the dawning fut- 
ure. Nothing can check the further development of finan- 
cial methods, and an extension of the knowledge which 
will enable us to make a better kind of money than any we 
have thus far had, but a check to the progress of human 
mtelligence. 

WHAT WE CAN REASONABLY EXPECT, 

In all probability, future progress will resemble that of 
the past, and be so slow as to be perceptible only by com- 
paring one long period of time with another. The people 
of this country will be likely to advance more rapidly than 
those of any other. We are now quite rapidly changing 
our national habits of thought in regard to money. The 
use of paper certificates instead of gold and silver coins is 
increasing, and the people are learning that a twenty-dollar 
silver certificate is far more convenient than a twenty-dollar 
gold coin. Public opinion is slowly but inevitably gravitat- 
ing toward favoring the abolition of national bank-notes 
and their replacement by an improved kind of greenbacks. 

During the ten years just past the financial branch of the 
United States Government has been largely controlled by 
men who, from ignorance, from a desire to aggrandize a 
small class, or from both those reasons, have been steadily 
trying to reverse our natural progress toward the best and 
most convenient money. Persistent efforts have been, and 
are still being made, to compel the use of gold and silver, 
by a people the majority of whom, if allowed to follow 
their own instincts and convenience, would not use either 
one of those metals. Fractional paper money has been 
withdrawn, silver certificates limited, and the number of one 



I 



FACTS REGARDING BANKERS, 



85 



and two-dollar bills curtailed, for the purpose of preventing 
the people from using the kind of money they prefer. 

BANKERS AND MONEY. 

It is frequently said, " Bankers know most about money 
because they do nothing but handle it." But a little reflec- 
tion shows that a' man may "handle " certain things all his 
life and still be entirely ignorant of the scientific principles 
relating to them. Thus a man may handle stones all his life 
and not know anything about geology. A life service as a 
butcher does not imply a knowledge of comparative anat- 
omy. A dealer in chemicals does not consequently under- 
stand the science of chemistry. Handling iron, copper, lead, 
and other metals does not teach a knowledge of the science 
of metallurgy. Many other illustrations similar to the fore- 
going could be adduced, all showing that those whose daily 
occupation is to " handle " a particular thing are almost in- 
variably ignorant of the primary facts and principles relat- 
ing thereto. Bankers are not an exception to this general 
rule. 

AN IRRESISTIBLE MOVEMENT. 

The American people have not advanced far enough in 
intelligence to dispense with gold and silver as a necessary 
portion of their monetary system. But the majority have 
arrived at a stage of progress which precludes them from 
desiring to directly use either of those metals as money. 
They believe gold and silver should be locked up in vaults 
as " a basis for the issue of paper money." But carrying 
around any kind of metal in pockets, as money, is every 
year regarded more and more as an inconvenient relic of 
barbarism. The natural development of the use of paper 
money has been temporarily thwarted. But all movements 
are irresistible whose impelling force is the steady unfold- 
ing of human intelligence. 

Improvement in the machinery of commerce, like all 
other manifestations of human progress, resembles the com- 
ing of warm weather. When February is past, the temper- 



35 SOCIAL STRUGGLES. 

ature does not rise steadily day by day, but moves upward 
in an irregular and intermittent course. Even when April 
has arrived, a reaction often occurs, of weather so severe 
that we should imagine midwinter was returning, if ex- 
perience had not taught us otherwise. As the past prog- 
ress of mankind has moved along a zigzag and irregular 
line, we have every reason to presume that future achieve- 
ments will follow a similar course. Periods of apparent 
stagnation, and even of actual reaction toward barbarism, 
will inevitably occur. But despite all discouragements, the 
tendency is steadily toward wiser and better methods, in 
financial as well as in all other fields of thought and action. 



CHAPTER VI. 

Origin of Prices. — Primitive Mode of Stating Prices. — Need of Com- 
paring all Things with a Few Things.— Money of Account. — A 
Price is always a Mode of Comparing one Thing with Another. — 
A Money Price is always a Numerical Comparison. — Antiquity 
of Numerical Comparison. — Fractional Money. — Primitive Mode 
of Making Change. — Division of Values one Function of Money. — 
Money of Account, resumed. — How Value is Expressed. — What 
happens when Specie Payments are Suspended. — Money of Account 
would Survive the Destruction of all Other Money. — False Pre- 
dictions. — Weight of Coins is seldom Considered. — Rise and Fall 
of Prices. 

Statement of a price is a mode of exchanging thoughts, 
ThoiigJit is exchanged first and tilings afterzvard. 

We have sketched the manner in which certain things 
originally came to be used as money. We have also traced 
the order in which improvements have been made in the 
things used as money, and in doing this, have found that 
several things have always, at the same time, been used as 
money. The next step in studying this subject is to ascer- 
tain how it has been made possible for mankind, in the 
midst of such a diversity of money, to learn each other's 
ideas of the value of a given thing, and to state the ratio in 
which one thing should be exchanged for another. 

The first step in every bargain is to estimate and compare 
the value of one thing with that of another ; and although 
this may be begun by one or both parties independently, it 
is always completed by directly or indirectly talking with each 
other; i. e., the parties to a trade exchange thoughts before 
they exchange tilings. Therefore, a necessary preliminary 
of all bargains is an ability of those who desire to make 
them to communicate clearly their thoughts to one another. 
At present, we possess a means of easily conveying our ideas 
of value to those with whom we desire to trade, and we are 

87 



88 SOCIAL STRUGGLES. 

now considering what that means is, and how we acquired 
it. 

To make the answer to the above questions easier, let us 
conceive a market-place frequented by a community with 
the most primitive ideas of commerce. We first observe a 
number of persons possessed of different things which they 
wish to exchange, and find among these persons a variety of 
opinions in regard to the proper mode of stating the, value 
of a thing. 

One man would say his goods were worth so much grain. 
Another would name the value of his wares in meat ; and 
another would name a certain number of sheep skins as the 
worth of his goods. Naming the value of goods in a vari- 
ety of ways would make it difficult for the different persons 
in the market to exchange thoughts and compare ideas. 

In other words, a number of persons wish to trade with 
each other but they have not yet invented a commercial 
language by means of which one man's opinion of the value 
of his goods can be so stated that all other men in the 
market-place will readily understand him. We are now 
trying to learn how a universal mode of stating values was 
arrived at, and how all persons came to understand it. 

PRIMITIVE MODE OF STATING PRICES. 

Let US first see what a man would naturally do who 
was without a knowledge of the commercial processes 
which are so familiar to us that we use them unconsciously. 
Obviously, he would name the value of a thing which he 
wished to dispose of, by the thing or things which he 
wished to get in exchange for it. If a man possessed of a 
horse that he thought was worth as much as two cows, and 
which he w^anted to exchange for two cows, were asked the 
value of his horse he would naturally say, "Two cows." A 
man with seven calves which he wished to exchange for a 
cow would naturally name a cow as the worth of his calves. 
A man with fifty bushels of wheat which he wished to ex- 
change for seventy-iive bushels of barley would be likely to 
state the value of his wheat at seventy-five bushels of 



HOW PRICES BEGAN. g 

barley. Similar statements of value would be made by 
persons possessed of other things, and the result would be a 
confused medley of language in regard to values, and 
considerable trouble in making exchanges, even in a mar- 
ket-place where a comparatively limited variety of things 
was offered in exchange. Where only three or four differ- 
ent things were for sale or exchange, a mutual understand- 
ing could easily be reached. But the difficulty of making 
appraisals of value and making exchanges would increase 
with each additional thing offered for exchange. 

This difficulty would arise from the defective manner in 
which the indispensable prerequisite of every bargain — viz., 
an interchange of thoughts — was conducted. The language 
of two persons may be alike in other respects and unlike in 
regard to commercial matters. Two persons cannot readily 
exchange ideas with each other unless they both apply a 
similar meaning to the same words or phrases. Further- 
more, statements which require reflection and computations 
to interpret them do not convey commercial information 
with sufficient rapidity, clearness and precision to meet the 
wants of the multitude who wish to exchange things with 
each other. Consequently, to a large extent, the different 
persons in the aforesaid case who wished to trade would 
not be able to make themselves perfectly understood by 
each other, and, as a necessary result, the relative value of 
different things — the ratio in which one thing should be 
given for another — would be arrived at with great difficulty. 

NEED OF COxMPARING ALL THINGS WITH A FEW THINGS. 

Even a person possessed of our present facility of esti- 
mating values, and computing and changing the value of 
one thing into that of another, would be somewhat puzzled 
if, on taking a walk through a business street, he should ask 
the price of a stove and be told, " Ten sheep skins." He 
would be still more perplexed if he asked the price per 
yard of certain cloth and were told, " A dozen eggs ; " or, 
if he asked the price of a hat and were informed that it 
was very cheap at the price , viz., '' A four-weeks-old pig.'* 



gQ SOCIAL STRUGGLES. 

His knowledge of commercial arithmetic would be still fur- 
ther drawn on if he asked a laborer in search of employ- 
ment how much wages he asked per day, and should be told, 
** A bushel of corn ; " or, if he asked the price of a dressed 
sheep, and was informed that it was worth " two bushels of 
wheat." 

The foregoing example may seem queer, but we must 
remember that it illustrates, in substance, precisely the dififi- 
culties which our ancestors once had to contend with. The 
reader will note that the perplexity of the aforesaid inquirer 
of prices arose chiefly from the fact that no two persons 
who offered goods for sale compared them with the same 
thing, and consequently the buyer failed to readily under- 
stand the comparative amount of value which was meant 
by the various statements of price. 

When a person puts a price on a thing, he thereby states 
that in his opinion the value of that thing is equal to the 
thing named as the price. If a man mark two dollars as 
the price of a hat, that is equal to saying : This hat is 
worth as much as two dollars ; or. This hat is the price of 
two dollars. 

If all the aforesaid persons who were asked the value of 
their goods had stated the price in corn, or any other one of 
the various things used as money, the man who wished to pur- 
chase could readily learn the value of the one thing with 
which all other things were compared. He could then exer- 
cise his own judgment by comparing this one thing with 
the various things on which a price was fixed, and thus 
determine whether those things were equal in value to 
the price. Therefore the root of the difficulty we are de- 
scribing lies in the fact that the man with things to sell uses 
language in naming prices which is not fully understood 
by the man who contemplates buying. 

When this occurs, although the language of these two 
men may be alike in other respects, they will fail to fully 
understand each other, for a similar reason that a man who 
talks French will not be able to fully state his ideas to a 
man who can understand nothing but English. 



STATING AND COMPUTING PRICES, gi 



MONEY OF ACCOUNT. 

In the early history of our race the number of things 
offered for exchange, at first, was very small and must have 
increased very slowly. Therefore the necessity of solving 
the problem of naming a price so that it would be easily 
understood came upon our fathers by a slow process. 
When it came, an invention was made which has been so 
long and so commonly in use that the great majority use it 
without thinking it once had a beginning- Our ancestors 
invented a commercial language, — a uniform mode of stating 
ideas of the worth of a thing, by the use of which two men 
can converse concerning the relative value of different 
things, and be at once understood by each other. This in- 
vention consists of certain words or terms to which the per- 
sons forming a community or nation agree to give a uniform 
meaning, and to use them exclusively when stating their 
ideas concerning the value of things. These terms, there- 
fore, constitute the uniform language adopted by a com- 
munity or nation in which values are estimated, prices 
stated, accounts kept, and all financial conversation carried 
on. This is the money of account, — the peculiar terms 
used by a people in stating prices, and conducting all other 
commercial transactions. Each nation has adopted a finan- 
cial language more or less peculiar to itself which has been 
called the " money of account," because it is the mode in 
which computations are made and accounts kept in that 
nation. 

We use dollars and cents as our money of account ; we 
state all prices in dollars and cents, and compute and keep 
all accounts in the same way. Great Britain uses pounds, 
shillings and pence just as we use dollars and cents ; Ger- 
many computes values in marks ; France keeps accounts in 
francs ; and every other nation has its peculiar money of 
account. Although each different nation has always used 
words different from those used by other nations, as a com- 
mon mode peculiar to itself of stating prices and keeping 
accounts, this important fact should be noted, viz. : TJie stib- 



92 



SOCIAL STRUGGLES. 



stance of all moneys of account, m every age and nation, is a 
practical mode of expressing the same fundamental idea. 

In order to understand this idea more clearly, let us dis- 
sect it into its component parts. The first portion of it 
consists of the undeniable fact that it is absolutely impossi- 
ble to really define or state the worth of a thing otherwise 
than by comparing it with some other thing. 

The second portion of this idea consists of the kindred 
fact that although a variety of methods may be employed 
whereby the value of some things may be compared with 
the value of some other things — as, for instance, one thing 
may be said to be as fine, or as rich, or as large as another — 
yet there is only one universal method of comparison by 
which the value of one thing can be compared with the 
value of all other things, viz., the numerical mode of com- 
parison. That is to say, the worth of all things can be com- 
pared with the worth of all other things, by saying that a 
given thing is worth one-quarter, or some other fraction 
of the value of another thing ; or, by saying that a given 
thing is worth ten times (or some other number of times) 
as much as another thing. 

The third portion of the aforesaid idea is that since a 
comparison of some kind is the only way in which the worth 
of a thing can be estimated or stated, it is desirable that the 
method of making comparisons should be the one which 
admits of universal application, viz., the numerical method- 
Furthermore, it is essential that all persons who make nu- 
merical comparisons of value should use the same numeral 
or unit as a standpoint from which to start in comparing 
one thing with another. 

The fourth portion of the said idea is that, as it is im- 
possible to estimate the worth of anything absolutely, the 
unit of value, or numeral, from which and by which all 
comparisons of value are made must bean assumed and 
arbitrary one ; that is, it may be symbolized, but, in the 
outset, it can have no real existence, because there is nothing 
except the imagination from which to construct it. 

Therefore all civilized nations have assumed that the 



A PRICE IS A COMPARISON. 



93 



.numeral " one " was the proper arbitrary standard of value 
from which to start in making comparisons of value. This 
imaginary standpoint has been given a concrete form by 
calling it one pound, one rouble, one mark, one franc, one 
dollar, and a variety of other names. But in all cases, its 
essential characteristic is one and the same thing, because 
all the different names aforesaid are simply different ways of 
naming the national monetary numeral, or unit of value. 

A PRICE IS ALWAYS A MODE OF COMPARING ONE THING 
WITH ANOTHER. 

The above four fragments, when combined, are the basis 
of the greatest monetary invention ever devised by man- 
kind. Let us now see if the foregoing statements can be 
further elucidated by an illustration. L has ten sheep, all 
alike, which he wishes to sell. M comes along and asks L 
how much a sheep is worth. If L should reply that " a 
sheep was worth a sheep " he would convey no idea except 
to raise a doubt of his own sanity or wisdom. M might then 
say : " I knew before I spoke to you that at the same time 
and place one thing is always worth a precisely similar thing ; 
therefore one sheep, at the same time and place, is always 
worth a precisely similar sheep. Please drop nonsense and 
tell me ivhat one sheep is worth in such language that I 
will be able to understand you." 

A moment's reflection shows that the only possible way 
for L to state his idea of the worth of one of his sheep is to 
compare it with something else besides one of its fellow 
sheep. Furthermore, it is apparent that the easiest and 
most intelligible way of comparing its worth with the 
worth of something else is to do so by using numbers. 
Thus L may say : " This sheep is worth ten geese." That 
would be equivalent to saying that this sheep was worth 
ten times as much as one goose. L might say : " This 
sheep is worth fifteen bushels of oats." That would be 
equivalent to saying that the sheep was worth fifteen times 
as much as one bushel of oats. Suppose M should ask L 
if he would sell all his sheep for a cow. If L said yes, that 



94 



SOCIAL STRUGGLES. 



would be simply another way of stating his opinion that 
one of his sheep was worth one-tenth as much as a cow. 

Two facts appear at once from the foregoing considera- 
tions. First, no matter what intelligible method or words L 
may adopt or use to give his idea of the worth of his sheep, 
they all necessarily involve a comparison of the sheep with 
something else, and a statement of the ratio in which he 
thinks a sheep should be given in exchange for something 
else. 

Second, it is evident that L and M, in carrying on their 
bargaining, will more readily understand each other if they 
steadily use the same object in making all their comparisons 
of value. Furthermore, it is clear that by exclusively using 
the object designated by the common consent of the whole 
community as the best one thing with which to compare all 
other things, they can exchange ideas still more easily. 

A MONEY PRICE IS ALWAYS A NUMERICAL COMPARISON. 

The aforesaid two facts substantially embody what ob- 
servation and experience have taught mankind is the best 
manner of making statements of value. In this country L 
would use the term "one dollar," as the money of account 
and the unit from which to start in making all comparisons 
of value. He would say : " A sheep is worth so many dol- 
lars and such a fraction of one dollar." In England L 
would employ the term " one pound," as the unit from 
which and by which to make all comparisons of value. In 
Germany, L would use as the money of account and unit of 
value, " one mark " ; and all his conversation would steadily 
refer to "one mark" and to fractions of one mark. No 
matter what country he may be in, nor what terms he use, 
L would constantly make all statements of value by a 
numerical comparison of the thing on which a price was 
thus put with an adjective which would mean " one." The 
name succeeding this adjective would depend simply on 
the custom of the locality, and not on any difference in the 
principle involved. 



HO W SA VA GES NAME PRICES. g c 



ANTIQUITY OF NUMERICAL COMPARISON. 

Having found that all civilized peoples of the world com- 
pute values by a numerical method, it would be interesting 
to know just when they first began to do so. There are 
several tribes now living which use the numerical method of 
reckoniiig values who are so low in the scale of intelligence 
that they have no written history. They compare the value 
of all things with a skin, a canoe, or a weapon of some kind, 
or with some other thing with which they make exchanges 
and are familiar. It is only a short time since the Indians 
of this country used a beaver skin as the unit of value and 
the money of account. These facts give us reason to pre- 
sume that the numerical method of reckoning value is older 
than human history. 

The fact that some nations use units of value which are 
widely different from those of other nations is an unimport- 
ant detail. The intent, object and result of doing certain 
acts are usually more important than the manner in which 
those acts are done. The Portuguese unit of value is so 
small that no necessity arises for dividing it. The principle 
involved is the same, whether the unit with which all values 
are to be compared is equal to the worth of one month's 
labor or one hour's labor ; or whether its representative 
weighs one pound or a fraction of an ounce. Furthermore, it 
makes no real difference how the number of these units is 
ascertained, — whether by counting or weighing them. A 
uniform agreement by a people to reckon the value of all 
things by comparing them in a numerical ratio with one 
thing is the substance of the matter now under examination. 

FRACTIONAL MONEY. 

We have heretofore found, at an early period in the be- ' 
ginning of commerce, the adoption of an arbitrary or con- 
ventional unit of value, which is multiplied and (unless the 
unit is very small) divided into fractions as circumstances 
may require. Let us now examine the special function and 
use of these fractions of the unit of value. 



96 



SOCIAL STRUGGLES. 



When men first began to barter with each other they 
frequently met with a practical difficulty which we have 
thus far omitted to consider. That difficulty is the equita- 
ble exchange of things possessed of unequal values and 
which it is not practicable to divide. 

A has a buffalo skin which he wishes to exchange with 
B for some rice. In this case a fair trade could easily be 
made, because the rice, without injuring it, can be divided 
into such an amount as equals the worth of the skin. But 
suppose A wishes to exchange a buffalo skin for an ax and 
the ax is deemed worth two-thirds the value of the skin. 
The first thought would be to cut off one-third of the skin 
and give the two-thirds for the ax. It takes but little 
reflection to show that such a course would spoil the buf- 
falo skin. 

Let us suppose another example. D has a cow which he 
wishes to exchange with E for a colt. After D and E have 
talked about the matter and compared the values of the 
two animals they conclude that the colt is worth one-quar- 
ter more than the cow. What is then to be done ? For E 
to take the cow, and after slicing off one-quarter of the colt 
give D the remainder, is certainly impracticable. The ne- 
cessity has arisen of doing what we now call " making 
change " or '' giving boot." This necessity arises, when two 
things exchanged are of such unequal value that something 
must be given in addition to the least valuable one, in 
order to do justice to the person who parts with the most 
valuable one. 

In early times, a problem similar to that above presented 
would have been solved by D giving E a couple of sheep, a 
yearling heifer, or some similar thing in addition to the 
cow to make the bargain even. This mode of making 
change was undoubtedly in use for a long time. In fact, it 
has been used to a considerable extent in this country 
within the memory of persons now living. During the first 
portion of the late civil war, when silver coins had disap- 
peared from circulation and the fractional paper currency 
had not yet been issued, we were on the verge of a general 



MAKING SMALL PA YMENTS. 07 

return to the primitive method of making change. Postage 
stamps, car tickets, dinner tickets, stage tickets, and a variety 
of similar things were rapidly coming into use as fractional 
money. 

When New Orleans was taken possession of by the 
troops under command of General Butler, the soldiers, 
when shopping, frequently used as change, at the request 
of the shopkeepers, the large hard crackers which formed 
their bread ration. In various cities throughout the 
Northern States a considerable number of individuals, cor- 
porations and railroad companies started mints of their own, 
and began to make small brass and pewter coins of differ- 
ent kinds with a variety of inscriptions thereon. These 
were put into circulation as fractional money and continued 
in use until the United States Government passed a law 
prescribing severe penalties against any person who made 
or used them as money. 

PRIMITIVE MODE OF MAKING CHANGE. 

The use of pigs, chickens, eggs, calves, and similar arti- 
cles for making change and other small payments is at- 
tended with great inconvenience and expense. M. Wolow- 
ski has told us that several years ago Mademoiselle Zelie, 
a noted singer, made a professional tour in various coun- 
tries and, in the course of her travels, gave a concert in the 
Society Islands. The bargain with the manager of the 
entertainment gave her one-third of the receipts for her 
services. When her share was counted, it was found to 
consist of twenty-three turkeys, three pigs, forty-four chick- 
ens, five thousand cocoa-nuts, and a quantity of bananas, 
oranges and lemons. A portion of this " small change " 
was consumed by Mademoiselle and her servants, and 
meantime the remaining pigs and poultry were fed with the 
fruit. 

This incident illustrates both the inconvenience of primi- 
tive money and the importance of having a kind of money 
which will enable those who possess it to divide values into 
small and regular fractions of an assumed unit, and to 
7 



98 



SOCIAL STRUGGLES. 



reckon such a division. Much inconvenience must often 
result if, when things are exchanged of unequal value, arti- 
cles of different and unequal size, quality and value are 
used for making change and paying small balances. This 
is not simply because the articles used for paying balances 
in such cases have different values, but because these val- 
ues would be so irregular as not to have a constant relation 
and easily understood ratio of value to each other. 

For example, K might desire to exchange two sheep with 
L for a heifer. Upon appraisal of value, suppose K and L 
decided that the heifer was worth the sheep and the value 
of half a sheep. In such case, after giving L the sheep K 
would still owe a balance to L of half the value of a sheep. 
The question would arise how to pay it. K might have a 
pig to give for his debt, but the pig might be considered 
worth more than half a sheep. Or, he might desire to give 
a turkey for change but upon reflection find that it was not 
worth quite enough. 

All the above and kindred difficulties are removed by the 
adoption of a unit of value, and by dividing this unit into 
small and regular fractions. It is obvious that a system 
which admits of the division of value into fractions of a 
definite and uniform size, can also be used to gather these 
fractions of value and put them together again into wholes. 
This is shown by the way we use our unit of value. It is 
very easy to multiply the figure " one " by any number. 
Therefore an estimate of the value of anything, no matter 
what it is, nor how great its value, can readily be stated at 
so many units. 

If an appraisal of a thing place its value at less than one 
unit, or at a given number of units and a portion of another 
unit, we then divide the unit into one hundred equal parts 
and say : This thing is worth so many units and such a 
hundredth part of a unit ; or we say, Such a thing is worth 
so many hundredths of a unit. 

The foregoing is what we really do and what we actually 
mean. But other terms are usually employed, and we say: 
" This thing is worth so many dollars and so many cents." 



DIVISION OF PRICES AND VALUES. gg 

This method of comparing all values with the unit " one," 
and of dividing this " one " into one hundred equal parts, 
enables us to state all kinds of prices, make both large and 
small payments, and pay small fractional balances accu- 
rately, without inconvenience. It also gives those who 
chance to receive more fractions of a dollar than they want, 
the ability to readily convert them into whole dollars when- 
ever they desire. 

In substance, those who employ the monetary systems of 
other civilized nations use their units of value as we do our 
dollars. For instance, the Englishman breaks up the na- 
tional unit, the pound, first into twenty equal parts, which 
he calls shillings. If required, he next breaks up each of 
these fractions into twelve parts, which he calls pence ; and 
if further division be necessary he breaks each of these frac- 
tions into four parts, called farthings. When this is done, 
he has divided the unit into nine hundred and sixty pieces, 
and as these pieces have a regular and uniform relation to 
each other, there is little difficulty in putting them all 
together again into one pound. 

Although the English and American money of account, 
the pound and the dollar, rest on essentially the same prin- 
ciple, our money has one practical superiority, viz., there is 
less arithmetic about it. We compute all values and break 
up our unit into fractions by the decimal system, the 
easiest mode of computation ever devised by man. 

DIVISION OF VALUES ONE FUNCTION OF MONEY. 

The division of values into fractions for the purpose of 
making small payments and paying small balances is one 
of the chief uses and functions of money. In fact, more 
money is actually used for those purposes than for making 
large payments and paying large balances. The larger 
payments are mostly made by what we do not call money 
at all, viz., checks and drafts. Moreover, the larger pay- 
ments are made less frequently, and only by the wealthier 
classes ; whereas the small payments are constantly made 
by the whole population. 



100 SOCIAL STRUGGLES. , 

Ability to readily divide values into fractions of a com- 
monly recognized whole unit furnishes a means whereby 
the prices of all things, no matter how small or how large 
their amount, can be readily stated and understood. By 
dividing the unit into a considerable number of regular 
fractions, the slight daily fluctuations and changes which 
prices constantly undergo can be easily registered. 

Division of the unit into pieces of a uniform proportion 
to each other enables the owner of one thing to transform 
it into units of money, and then divide and exchange it for 
such number and variety of other things as its value and 
his wishes may determine. It also furnishes an aid for 
comparing the value of one thing of little value with 
another thing of little value, and of estimating the ratio in 
which they should be exchanged for each other. Further- 
more, it renders it possible to translate all kinds of values 
and prices from one kind of money, and reckon them in 
another kind of money ; to multiply the value of one thing 
which is expressed in fractions by the numbers of that 
thing, and thus find their aggregate value ; and to add, 
subtract and compute the fractional values transferred in 
a great number of exchanges, and ascertain the final result. 

MONEY OF ACCOUNT, RESUMED. 

Having considered how the assumed unit of value of 
different nations is divided for convenience infeo fragments, 
the value of each one of which has a uniform proportion to 
the value of the whole unit, we can now resume our study 
of money of account. 

All civilized nations have, in substance, at least three 
kinds of money : First. The imaginary money, the money 
of account, in the language of which all accounts are 
kept and recorded, and by the help of which all values 
are estimated and compared with one another. Second. 
The current money, the money actually in use and cir- 
culation. This may, and often does consist of several dif- 
ferent kinds of money, and those varieties of money may 
be more or less intermingled in all commercial transac- 



HOW WE STATE IDEAS OF VALUE. jqj 

tions. Third. The national standard of coinage ; or, the 
natiohal legal-tender money. This may consist of one 
kind of money ; or, it may consist of several kinds of legal- 
tender money. 

The national money of account necessarily consists of 
one kind of money, to the unit and fractions of which the 
same terms are always applied. But the second and third 
kinds, aforesaid, may embrace a great variety of different 
moneys. All of the said three kinds of money may be sepa- 
rate and distinct ; — they may be substantially incorporated 
in one and the same thing ; or, they may be all three es- 
sentially blended in two different kinds of money. 

Let us now dissect and illustrate the foregoing state- 
ments. To those who have not thought about it, nothing 
seems much more absurd than the idea of an imaginary 
money of account and an imaginary unit of value. 

HOW VALUE IS EXPRESSED. 

Upon reflection, we observe that in comparing and stat- 
ing values we cannot do as when defining colors, for in such 
case we have an absolute standard before us ; viz., the 
colors of the rainbow, the colors of light. We can say this 
is red, this is yellow, and so on, simply because we possess 
an unchangeable standard of color. But value, as we shall 
hereafter demonstrate, is a mental perception of the worth 
of a thing. Therefore it is impossible to say of a thing, 
this is absolute value. We might as well attempt to pre- 
cisely define and put in concrete and material form all 
other mental conceptions and emotions, and after our labors 
were completed say : This is hate, this is love, this is fear, 
and so on. We can symbolize and typify a human thought 
or emotion by making a material form which we imagine is 
a correct representation of it. For example, beauty is a 
mental perception of harmonious proportions and colors. 
We can make a thing which in a partial sense materializes 
this thought. Such a thing we call beautiful, — but it is 
not beauty, in the abstract, because that is as intangible as 
any other thought. A " beautiful " thing is merely a sym- 



I02 SOCIAL STRUGGLES. 

bol of an idea. Men's ideas of beauty differ. Therefore, 
what to one man is a symbol of beauty, to another man is 
the reverse of beautiful. 

Thus we see two facts : First. Value cannot be put in 
material form except as a symbol of an idea. Second. As 
it is necessary in comparing values to start somehow or 
somewhere, we are driven to assuming and imagining an ar- 
bitrary unit of value from which to date and make all our 
comparisons. 

The correctness of the foregoing statements is shown by 
the fact that the unit of value, the starting-point of the 
money of account of several nations, has been employed to 
compare and reckon values a countless number of times 
without even attempting to give it a material symbol. 
Thus the British pound sterling has been a money of ac- 
count for many centuries, but the first "pound " was put in 
symbolic form when the sovereign was coined in i8i6. 
The rouble was the Russian money of account for a long 
time before the reign of Peter the Great, when a piece of 
money called *' a rouble " was first coined. 

The unit of the money of account of Portugal is called a 
" rei." But no coin called a rei has ever been made. The 
rei is an imaginary money of account, which, unlike most 
other moneys of account, has never had a symbolic represent- 
ative. The unit of value and money of account of Spain 
for a long time was the " maravedis." But no such coin as 
the -'maravedis" ever existed, — it was a purely imaginary 
money without any concrete representative. In this coun- 
try we frequently employ the thousandth part of a dollar in 
reckoning and stating values. But no one ever saw a mill, 
— it is simply an imaginary piece of money. We can men 
tally create the hundredth part of a mill just as readily as 
we can imagine the tenth part of a cent. 

Other examples of a purely imaginary money of account 
might be cited, but those above given are sufficient to illus- 
trate the principle we are examining. 



HOW WE TRADE WITHOUT COINS. 103 



WHAT HAPPENS WHEN SPECIE PAYMENTS ARE SUS- 
PENDED. 

It almost invariably happens, whenever a nation is suffer- 
ing from a very severe and exhausting war, that what is 
called " a suspension of specie payments" occurs. That 
is: the money which forms the national standard of coin- 
age, the coins which most persons suppose do not represent 
anything, but are of themselves units of absolute *' intrinsic 
value," cease to circulate. People in the market-places can 
no longer sell goods and receive what is commonly called 
*'■ intrinsic value" in exchange therefor. 

Under such circumstances, if the prevailing ideas about 
money were correct, the people would at once be deprived 
of all their money, — their means of " measuring values " 
and reckoning accounts would be gone, and commerce 
would cease, except the limited amount which could be car- 
ried on by what the nation would be forced to return to, — 
primitive barter. And, as heretofore seen, in proportion as 
population grows numerous and commerce complex, ex- 
changes by means of barter grow more and more inconven- 
ient and difficult. 

But, we know from experience that the disuse of stand- 
ard coins does not interrupt commerce for an hour. Trade 
goes steadily on, — people continue to buy and sell, and all 
values are compared and reckoned in the same terms as 
when the coins were in use. This undeniable fact is read- 
ily explained when it is remembered that before " suspen- 
sion " commerce was essentially carried on by the imaginary 
money of account ; and after suspension it was carried on 
in the same way. No material change has occurred, no new 
conditions have forced business to adjust itself to them, 
and consequently no commercial stagnation or convulsion 
has arisen. 

The only difference in the mode of carrying on trade be- 
fore suspension and after, is the change in the things used 
to represent value. Before suspension, to a limited extent, 
coins were used which were symbols of the imaginary 



I04 



SOCIAL Sl'RUGGLES. 



money of account. Where coins were used before suspen- 
sion, paper money is used after suspension as a symbol of 
symbolic coins. The real thing in the people's minds, the 
imaginary money of account and the unit of value, remains 
substantially unchanged. 

MONEY OF ACCOUNT WOULD SURVIVE THE DESTRUC- 
TION OF ALL OTHER MONEY. 

Let us consider how we would compute values if, instead 
of being deprived of metallic money, as we are when specie 
payments are suspended, we were also at the same time 
stripped of paper money and had no power to make either 
it or a substitute therefor. Undoubtedly, we should be 
subjected to great inconvenience by being compelled to re- 
turn to barter. But we would have one enormous advan- 
tage over primitive man : we would still have left the imag- 
inary dollar, — the money of account, and with it we would 
continue to compute values and reckon accounts. Barter 
would be carried on by constant allusion to dollars which 
had no symbolic' representative, just as we now speak of 
mills which are not represented by a concrete form except 
as we imagine a dollar divided into a thousand pieces. 

A people deprived of all material symbols of value 
would thereby lose to a considerable extent that power of 
easy commercial association which is one great distinction 
between civilized and barbarous nations. But the imagi- 
nary money of account, under such circumstances, would 
largely obviate the necessity which otherwise would exist 
of an entire return to primitive modes of exchanging prop- 
erty. 

For the same reason that business is not paralyzed by a 
suspension of specie payments, the addition to, or sub- 
traction from, the currency of one kind of standard money 
has in itself no tendency to derange commerce. Before 
February 12, 1873, the United States had always two 
kinds of standard coins, both of which M^ere a full legal ten- 
der : viz., the gold dollar and the silver dollar. February 25, 
1862, a third kind of money was created which was a full 



SEVERAL KINDS OF MONEY. jqc 

legal tender for all purposes except payment of custom du- 
ties and interest on the public debt ; viz., the greenback. 
We thus had three kinds of legal tender immediately after 
February 25, 1862. A fourth kind of money was made by 
the National Bank Act, June 3, 1864. This money is a 
legal tender for all debts due the Government except cus- 
tom duties. 

By the demonetization of the standard silver dollar, the 
number of legal tenders, except for sums not over five dol- 
lars, was reduced to tzvo, not counting the national bank- 
notes, the trade-dollar, and the fractional money. 

The act of February 28, 1878, restored the legal-tender 
quality of the silver dollar, and increased the number of legal- 
tender moneys to three. But the aforesaid changes in the 
number of legal tenders were almost unnoticed, simply be- 
cause people were not accustomed to make exchanges for 
gold dollars, silver dollars, or paper dollars, but for the 
imaginary dollar which forms the money of account. 

FALSE PREDICTIONS. 

After the passage of said act of 1878 several "econo- 
mists" predicted with great positiveness and vehemence 
that the business of the country would be in chaos in a few 
months thereafter as an inevitable result of the introduction 
of a new standard coin. These " learned " school-masters 
seemed to really believe business could not be properly 
carried on with more than one legal-tender money. But 
their confident predictions have shared the fate of other 
statements made without reference to actual facts. 

As will, in the proper place, be more fully shown, the only 
important result of the remonetization of silver has been 
that prices have not fallen as low as they otherwise would 
have done, thus producing the reverse of the tendency 
which was produced by stopping the coinage of silver. 

When we hereafter come to study the causes which raise 
and depress prices, we shall find that the number of differ- 
ent legal-tender moneys in circulation has no effect what- 
ever on prices, except as it may increase or diminish the 



io6 



SOCIAL STRUGGLES. 



gross amount of legal-tender money. But the total sum of 
legal-tender money in a country is not necessarily changed 
by an alteration in the number of the kinds of legal 
tender. 

THE WEIGHT OF COINS IS SELDOM CONSIDERED. 

Most of the writers who are kind enough to give us in- 
struction in finance state that coins are used as money, and 
pass current, only because people know that they contain 
a fixed amount of pure gold and silver, and consequently 
know that they have a " fixed value." However, as a mat- 
ter of fact easily demonstrated, the vast majority of persons 
have nothing in mind but the money of account. They read- 
ily comprehend prices stated in the money of account be- 
cause the value attached to its unit has become impressed 
on their minds. But any marked deviation from this familiar 
mode of estimating, comparing, and stating prices, confuses 
them. If a dealer in clothing should put in his show 
window a coat marked, " 348 30- looo grains of pure gold ; " 
or should mark a pair of trousers, " Cheap at 2,970 grains 
of pure silver ; " how many persons at first sight would be 
able to say whether they thought the prices fair? Cer- 
tainly, not one person in a hundred. 

But if he marked the coat "$15," and the trousers 
" $8," every one would understand him. This would be 
so in this country because the dollar is here the money of 
account, and each person has an idea of its meaning ; where- 
as his mind has not been accustomed to associate an idea of 
a certain value in connection with one or two thousand, or 
any other number of grains of gold or silver. 

If a shop-keeper in Russia should mark his goods in " dol- 
lars " he would thereby convey but little idea to his cus- 
tomers of the prices asked, because the dollar is not the 
Russian money of account. 

Prior to the Revolutionary War, pounds, shillings and 
pence were the money of account in this country. One of 
the earliest measures of the United States Government was 
to estabhsh the decimal system of currency, and substitute 



INEQUALITIES OF PRICES. JO^ 

the dollar for the pound, as the unit of value. But the es- 
tablished habit of estimating values, and reckoning accounts 
in pounds, shillings and pence faded away very slowly. 
Many merchants retained the old method to the day of 
their death, and noticeable traces of the custom of reckon- 
ing values in shillings remained sixty years after the coinage 
of dollars. 

If the English Government were to legally abolish 
pounds, shillings and pence, and commence coining dollars 
and fractions of dollars, instead of sovereigns and fractions 
of sovereigns, the people of England, with few exceptions, 
would go steadily on in the old rut and continue to esti- 
mate, compare and state all values by the pound. The 
habit of using the pound as the unit of value is so firmly 
fixed in the national mind that a century would probably 
pass before dollars would be used as readily as pounds 
now are. This would be so because the current coins of a 
country are simply the symbols of something deeper and 
more potent behind them, viz., the imaginary unit of value, 
the established money of account. 

RISE AND FALL OF PRICES. 

During the recent civil war, especially during the first two 
years of that struggle, those who entertained the common 
belief that gold had a fixed value, and that therefore the 
price of paper money stated in gold was a correct measure 
of the value of things, were very much puzzled by the fact 
that the price of real estate and many other things remained 
comparatively but little affected, while rapid and enormous 
fluctuations of value were registered by the barometer of 
the Gold Exchange room. This arose from two causes, 
one of which will hereafter be stated. The other cause is 
the fact that the great mass of the people compute and 
state all values by the money of account, and when, by long 
habit, they have acquired a certain idea of the worth of 
the unit of value, viz., the imaginary dollar, they adhere to 
it after the current money, or the legal-tender standard 
money, or both of them, have undergone a change in value. 



io8 



SOCIAL STRUGGLES. 



The value of the money of account may remain but little 
changed for a considerable time, while current money and 
the legal-tender money have either increased or decreased 
materially in value. 

At the beginning of the war, the first change in prices 
was observed in imported goods. The next change occurred 
in those articles in active demand for export ; next, personal 
property most frequently bought and sold rose in price ; 
then all kinds of personal property and labor were quoted 
higher ; and, lastly, the price of real estate was affected. 
Like personal property, the real estate deemed most desir- 
able, and that most frequently bought and sold, rose first in 
price. 

If a shallow dish containing a pint of water be exposed to 
either cold or sunshine for one hour, its temperature will be 
materially changed. If a barrel of water be similarly exposed 
much less change will occur, and the effect will diminish in 
the ratio that the amount of water is increased. Finally, 
we find that a large deep lake or ocean is affected sensibly 
only by a long continued exposure to a considerable de- 
gree of heat or cold. 

Changes often take place in the value of current money, 
legal-tender money, and the money of account as the result 
of causes hereafter to be discussed. 

If we liken the money of account to a large body of water, 
the current money to a smaller, and the legal-tender money 
to the smallest body of water, we iind that these causes 
operate on the three different kinds of money in a manner 
analogous to the action of heat and cold on different sized 
bodies of water, and produce similar results. A slight tem- 
porary cause may affect the legal-tender money, or the cur- 
rent money, without producing an appreciable effect on the 
money of account. But if this cause be very powerful, or 
long continued, the money of account becomes changed in 
consequence of a change in the purchasing power of its unit. 
Results occur in the same order, no matter whether the 
change consists in an increase or a decrease in the worth of 
the imaginary unit of the money of account. They are first 



ORDER IN WHICH PRICES CHANGE. 



109 



shown in the prices of those things which may be compared 
to a dish of water, — those tilings which are most mercurial 
and subject to the greatest commercial activity ; and finally 
they appear in the prices of that great mass of wealth which 
is comparatively seldom bought and sold. Real estate is 
the last in rising and the last in falling in value. Real es- 
tate most in demand, and most frequently bought and sold, 
rises in value before the real estate which is seldom trans- 
ferred. 

The aforesaid considerations explain why it is that some 
things are often falling in price at the same time that the 
price of others is stationary, or even rising. They are also 
of great practical importance to business men upon whom 
rests the necessity of making bargains to be executed at a 
future time, as they may help to forecast the prices of 
given things at such future date. 



CHAPTER VII. 

Effect of Legislation on Value. — What Legislation is. — Power of Legis- 
lation is Limited. — The Laws of Trade. — An Absurd Question.— 
Inconsistency of those who Deny that Legislation can Create Value. 
— Historical Example of the Creation of Value by Legislation. — Evi- 
dences that a Thing is Valuable. -Value of a Man's Services. — Leg- 
islation may change the Value of a Person's Services. — Historical 
Legislation which affected Values. — Effect of Aforesaid Law. — What 
made the Aforesaid Law Possible. — A Plea in Defense of the 
Money-Lenders. — Effect of Other Legislation on Paper Money. — 
Bankers' Schemes. — National Bank Act. — Subterfuges. — Why Na- 
tional Bank-Notes have not been Destroyed. — Attacks on the Green- 
backs. — The Five-twenty Bonds. — Difficulty of Satisfying Avarice. — • 
A Hypocritical Pretense. — Proclivity of Mankind to Hypocrisy. — 
Means Employed to perpetrate a Crime. — Why Horatio Seymour 
was Defeated. — National Credit. — What Experience Teaches. — 
Effect of Act of March i8, 1869. — Other Acts of Repudiation and 
Disgrace. — What made the Aforesaid Wrongs Possible. — Fruits of 
Crime and Folly. — Views of so-called Statesmen. — Simple Facts 
Overthrow false Theories. 

Ignorance of the nature of value is the parent of the suppo- 
sition that legislation has no effect upon it. 

Perhaps there is no doctrine w^hich writers on political 
economy more unanimously agree to assume as a funda- 
mental truth than the statements that " value cannot be 
created by legislation," and that " legislation is powerless 
to create, to increase, or to diminish value." From this 
doctrine an important practical result naturally and neces- 
sarily flows ; viz., the idea that the value of money can 
neither be created, increased, or diminished by legislation. 

The examination heretofore given this subject has forced 
us to the conclusion that value is human judgment of the 
comparative worth, utility, or desirability of a thing, or of 
its ownership and possession ; and that this judgment is 
formed and depends on the relation of that thing to man- 

IIO 



LEGISLA riON IS A KIND- OF LABOR. y\\ 

kind and to other things. In other words, value is created, 
increased and diminished by circumstances and conditions. 
Therefore whether legislation can create value or not de- 
pends entirely on the answer to other questions; viz.. Can 
legislation create conditions, facts and circumstances? Can 
legislation change the relation of a thing to mankind, and 
the relation of one thing to other things? Can legislation 
cause a diminished or an increased use of a thing, and 
thereby diminish or increase the demand for it ? 

WHAT LEGISLATION IS. 

Before we can answer the aforesaid questions we must in- 
quire what legislation is. In doing this our attention is first 
attracted by the fact that legislation is not manual labor. 
But this is not a decisive test, from the fact that a consider- 
able portion of what the world regards as its most valuable 
things are chiefly the result of mental labor. 

Legislation is the mental labor of a considerable number 
of men. In performing this labor, legislators have the ben- 
efit of the history of the practical results of the mental 
labors of generation after generation of other legislators. 
So that in theory, and largely in fact, legislation is the re- 
sult of an accumulation of the labors of bygone legislators, 
combined with the labors of living law-makers. 

Legislation not only represents the labors of a great num- 
ber of legislators who have lived at different times, but it 
also represents the thoughts and experience of all mankind 
in regard to laws which have been enacted, and subjected to 
practical tests. 

What is legislation an attempt to do? It is simply an 
effort to organize the forces of society in such a manner that 
certain modes and forms of thought and action will be en- 
couraged, and other forms of thought and action will be dis- 
couraged. Legislators, with more or less practical success, 
endeavor to organize the social forces against things which 
they regard as of evil tendency. Legislation, therefore, is 
an organization of society for the purpose of creating cer- 
tain conditions which legislators deem desirable and salu- 



112 SOCIAL STRUGGLES. 

tary, and this organization can only be effected by the con- 
sent and co-operation of the ruling class in society. The 
rule and domination of this class may arise either from 
their superior numbers, from their superior intelligence and 
power, or from both causes combined. But legislation 
always implies some degree of control over the forces of 
society, else the Legislature would not exist. 

We are forced to admit that the labor of a single indi- 
vidual can create conditions, and thereby create value. It is 
also apparent that a few men may combine together, may 
organize a company, and by this means create a condition 
which will create value. 

Suppose a hundred industrious and thrifty families form 
an association, and buy ten thousand acres of wild land. 
This land is fertile, well supplied with water and timber, 
and has on it coal which can be mined with a moderate 
amount of labor; but, in consequence of a lack of popula- 
tion in its neighborhood, the value of the land is estimated 
at only two dollars per acre. As soon, however, as this col- 
ony of emigrants have perfected their title, the land is en- 
hanced in value. A still greater rise in its value occurs as 
soon as the hundred families have arrived on the spot and 
staked out their respective portions of the land. This 
is simply because the land is thereby placed under different 
conditions from what it was before. 

If the organization of a small portion of a nation can cre- 
ate conditions and value, it is certain that the organization 
of the whole nation for a definite purpose can also create 
conditions and value. Legislation is a mode of organizing 
the people who are subject to the laws enacted. By the 
labors of a legislature the thoughts and conduct of a whole 
nation are placed under new conditions. As an inevitable 
consequence, the national efforts produce different results 
from what they would if those new conditions had not been 
created by law. Legislation, therefore, either for good or 
for evil, is the most potent of all social forces. This is nec- 
essarily so, because legislation is the expression of the senti- 
ments of the dominant class of society. Legislation is one 



HUMAN CAPABILITIES ARE LIMITED. j jo 

of the great educators of the people ; it organizes and com- 
bines a considerable number of human tendencies and de- 
sires, and thereby converts them into auxiliaries of statute 
law, 

POWER OF LEGISLATION IS LIMITED. 

It is undeniably true that legislation is not omnipotent. 
Like all other human agencies its powers are limited, but 
this does not show that it has no power at all. No one 
claims that legislation can either subvert or create a natural 
law. Legislation exerts influence, not by opposing natural 
laws, but by creating new conditions under which latent 
forces come into play, and by which natural laws operate in 
different ways, because they are giving direction to differ- 
ent forces. When a farmer plows a field, he does not 
subvert existing, nor create new natural laws. He simply 
changes the conditions under which the sun, rain, air and 
kindred forces will have an effect on the earth. He 
changes the relation of things ; he changes the conditions 
under which natural laws shall work. Legislation infliiejices 
society just as a farmer does his fields : it creates new condi- 
tions under which social lazvs and forces work out different 
results. 

THE LAWS OF TRADE. 

We are frequently told that " legislation has nothing 
whatever to do with finance ; " that all such things are 
governed by the " laws of trade." Many credit this state- 
ment, and anarchists give credence to the kindred assertion 
that " legislation has little or no influence on anything," 
except for evil ; that the best way would be to " abolish all 
laws and let everything take its natural course." Recently, 
an event occurred in the streets of this city which demon- 
strated in a striking manner the folly of such doctrines. A 
street parade of colored men took place. Before them 
marched a platoon of white policemen, and in the proces- 
sion were four bands of music, three of which were entirely 
composed of white men. Such a thing would have been 



jj. SOCIAL STRUGGLES. 

impossible thirty years ago. The poHcemen would then 
have refused to march, and the musicians would have re- 
fused to play in company with "niggers." We should 
then have heard the old story that it was " contrary to nat- 
ural law for blacks and whites to associate except in the re- 
lation of slaves and masters." But law has converted these 
once despised black men into citizens, with the right to 
vote and hold office. The possibility of the aforesaid event 
has been largely wrought by changes in legislation, which 
have produced changes in public sentiment. What are 
calleti the " laws of trade" are merely the phenomena ex- 
hibited by human society under existing conditions, and 
one of the most potent of these conditions is the legislation 
then, and for some time previously, in force. Change the 
legislation and the so-called " laws of trade " also change to a 
greater or less extent. 

AN ABSURD QUESTION. 

Many of those who hold that legislation has no influence 
on values appear to imagine all opposition to their favorite 
dogma crushed by asking one question : " If value and 
money can be created by legislation, why not create an un- 
limited amount of them in that way and no longer levy 
taxes for the support of the Government ? " 

This absurd question would deserve no serious answer 
were it not for the fact that many persons in high positions 
think it a conclusive argument. The solitary judge of the 
United States Supreme Court who differed from the rest 
of his associates on the question of the constitutional power 
of Congress to issue legal-tender paper money in time of 
peace, seems to have based his opinion on the idea that 
the aforesaid inquiry conclusively settled the matter. 

This question reminds us of the story of a man who did 
his cooking by an open fire-place. When told that half his 
fuel could be saved by using a cook-stove, he replied that 
such a statement must be false; because, if half the fuel 
could be saved with one stove, two stoves would enable him 
to save it all and cook without any fuel whatever. 



FOOLISH QUESTIONS. 



11$ 



A number of kindred questions could be asked, each one 
as absurd as the one aroresaid. For example, we might in- 
quire : If a good farmer can raise twenty bushels of grain 
on an acre where only five bushels once grew, why cannot 
a still better farmer raise eighty bushels of grain on the 
same land ? If labor create value, why not create an un- 
limited amount of value by labor, and cease our continual 
struggle to supply our wants? If elegant houses can be 
created by labor, what is the use of living in poor, homely 
houses ; why not build fine houses enough to supply the 
whole community with them ? 

HUMAN CAPACITY IS LIMITED. 

All necessity for asking the foregoing questions and a 
thousand similar ones is obviated by the exercise of a little 
reflection and common sense. Value is created by labor, 
but this undoubted fact does not warrant us in presuming 
that there are no limits to the power of labor to create value. 
Human capacities in every direction are hedged in'with lim- 
itations. Bounds are appointed that we cannot pass. The 
production of land, and kindred results in various other de- 
partments of industry, can be increased, but we soon reach 
the extent to which this increase can be carried. All agree 
that the various necessaries of life and forms of wealth can 
be created by labor, but after toiling for thousands of years 
mankind are now but a short remove from starvation, and 
millions of persons are constantly in a state of poverty. 

Our control over natural forces is steadily growing, and 
we can now produce conditions which create wealth more 
easily than ever before. But man's power to create value 
is still so limited that if all the wealth in the world were 
equally divided, each man would have much less than what 
is generally thought requisite for a competence. 

Legislation can create conditions and thus create value; 
but this power, like all other human capabilities, is confined 
within strict and narrow limits. Legislation can place 
pieces of paper under certain conditions and thus create 
money ; but it by no means follows that therefore legislation 



Il6 SOCIAL STRUGGLES. 

can create an unlimited amount of money. Because a miner, 
under some circumstances, may be able to dig one ounce of 
gold in three days, it by no means follows that three hun- 
dred men could dig one hundred ounces every day, and in- 
definitely continue to do so.* 

On the other hand, because the capacity of a single labor- 
er, and the powers of a number of laborers sitting as a legis- 
lature, to create conditions and thus create value are limited 
by narrow and impassable boundaries, it does not therefore 
follow that this capacity has no existence. We might as 
well argue that because a man's powers in all other respects 
are limited that therefore he does not actually possess any 
powers whatever. For instance, we know that a man can- 
.not walk fifteen miles in an hour ; but this does not prove 
that he may not walk two or three miles in an hour. 

INCONSISTENCY OF THOSE WHO DENY THAT LEGISLATION 
CAN CREATE VALUE. 

There is one curious fact in regard to the doctrine that 
legislation cannot create value. Many persons assume that 
nothing depends on legislation, but that " natural laws " are 
the sole causes which produce results. But suppose it is 
said : " Since laws have no influence, let us repeal all exist- 
ing laws, and among other things let us withdraw legal sup- 
port to the value of gold, and legal power to collect debt." 

Immediately a violent objection is made to the destruc- 
tion of what a moment before was pronounced of no influ- 
ence. But if law have no effect, why should persons who so 
believe object to the repeal of laws ? 

This inconsistency is chiefly due to two causes : First. 
Profound ignorance of the nature of value and the causes 
which produce it. Second. Personal contentment and sat- 
isfaction with the results which long-existing laws have 
helped to produce. The few men who own most of the land 
in England are quite satisfied with the laws which uphold 

* If that were the case, and the product of gold mines could be increased 
by human labor and ingenuity proportionately to all other products, gold 
would maintain a more uniform value than it now does. 



THE FRACTIONAL PAPER MONEY. 



117 



their title to it. All over the world, the great majority of 
those whom the present order of. things has placed in opu- 
lent circumstances are averse to change. " So long as we 
are comfortably situated why hazard the result of a change ? " 
Those in favor of the " let alone " doctrine are chiefly those 
who now possess more than their equitable share of the 
world's wealth. They do not wish any inquiry made into 
the rightfulness of the means whereby their possessions 
were acquired, for fear that such an examination might re- 
sult in laws which would diminish their wealth. Hence, in 
every country and age a majority of the wealthy classes 
have always instinctively resisted every movement, the di- 
rect or indirect object of which was to impartially ascertain 
and make public the justice of existing laws. 

HISTORICAL EXAMPLE OF THE CREATION OF VALUE BY 
LEGISLATION. 

The power of a legislature to create value, and the limita- 
tion of that power, are both exemplified by the act passed 
by Congress, March 3, 1863. Prior to that time, silver coins 
had disappeared from circulation, and a want of fractional 
money existed. That act authorized the issue of fifty mill- 
ions of paper money, in form of fractions of a dollar, and 
allowed the holders of those fractions to return them to the 
Treasury and receive dollars therefor whenever they chose 
to do so. 

Said act placed pieces of paper, which previously were 
worth only a few cents per pound, under conditions which 
enabled them to supply a want, viz., the need of fractional 
money. The result was that a large value was conferred 
on those pieces of paper. The extent to which this value 
could be conferred was shown by the extent to which a de- 
mand for such fractional money existed. Although fifty 
milhon dollars were legalized, that amount was never issued ; 
the demand proved to be for about forty-five millions, by 
the fact that all issues above that sum were promptly re- 
turned to the Treasury as not needed. 

If the fractional paper money had not been convertible 



Il8 SOCIAL STRUGGLES. 

into greenbacks, it would have fallen below the value of 
greenbacks whenever more than the amount actually needed 
by the people was issued. As water never rises higher than 
the dam which retains it, the value of the fractional money 
kept constantly on a level with the value of the greenback. 
As it was, whenever there was a surplus of fractional paper 
money, the excess ran over the dam and was changed into 
whole dollars. 

Under the delusion that this fractional paper money had 
no value beyond its worth for paper rags, the Government 
largely increased the interest-bearing public debt for the 
purpose of buying silver bullion. The fractional paper 
money was destroyed, and replaced by silver coins, which it 
was imagined would perform functions that the fractional 
paper money had failed to execute. The country was per- 
suaded by so-called " financiers " that if the people only 
had silver coins they would have a " measure of value," and 
then it would be easy to go out shopping and always get 
the exact amount of value that was parted with. 

But experience has demonstrated that the silver coins are 
no more valuable to the community than the fractional paper 
money was. This is so, simply because the coins fill the 
same office that was previously filled by the paper money. 
The coins are exchangeable for greenbacks, and the paper 
fractions were also exchangeable for greenbacks. As a thing 
is worth what it can be equally exchanged for, it follows 
that the worth of a greenback determines the value of the 
thing given for a greenback. The silver coins are now worth 
as much as gold for the same reason that the greenback is. 
If the fractional paper money had not been destroyed, it 
would also have been worth the same as gold. 

Since experience has shown that the denunciations of the(, 
fractional paper money were not founded in reason, but on 
crude theories and ignorant prejudice, the Government could 
do no more popular act than to issue twenty-five millions 
of paper dollars in form of one-half and one-quarter dollar 
notes. 



HOW WE KNOW A THING IS VALUABLE. 



EVIDENCES THAT A THING IS VALUABLE. 



119 



It has been said that "the fractional paper money had an 
exchangeable value, but no real intrinsic value." This state- 
ment illustrates the popular confusion in regard to the nature 
of value and how it is created and constituted. 

Whatever is exchangeable equally for things which all 
concede have a " real value " is itself possessed of a " real 
value ; " else why should persons give valuable things in ex- 
change for it ? Whatever supplies a want and performs a 
duty or function is just as valuable, for that purpose, as it 
would be if made of different and more costly materials. A 
brass baggage check is just as valuable, as a baggage check, 
as it would be if made of silver. It is true that the silver 
check would be more valuable than the brass check for melt- 
ing and using for some other purpose. But this fact does not 
affect its value as a baggage check. Fractional paper money 
was valuable because it supplied the need of a medium of 
•exchange. As it performed a valuable service, it had pre- 
cisely the same value for that purpose as the silver coins 
which now perform the same service. 

Fractional paper money is far more convenient to use than 
silver coins. The objection to it on the ground that dirty 
bills were sometimes in circulation could be obviated by mak- 
ing all the principal post-offices agencies for exchanging 
new for worn bills. 

All difficulty of seeing clearly why the fractional paper 
money was just as valuable as silver coins disappears when- 
ever the nature of value is properly considered. 

Tzvo different materials have the same value so long as they 
are under the same conditions, supply the same zvant, and per- 
form the same duty. 

Mahogany is a valuable timber for conversion into furni- 
ture ; but if used for piles driven into the mud to rest build- 
ings on it is no more valuable than yellow pine. A rose- 
wood scavenger cart would be no more valuable than a cart 
made of less valuable timber. The value of a plow depends 
on its ease of draft and the thoroughness with which it per- 



120 SOCIAL STRUGGLES. 

forms its work. Its value as a plow would not be increased 
by trimming it with gold or silver. The value of a thing for 
a particular purpose does not depend solely on its value for 
other purposes. Thus gold is far more valuable than steel 
for filling decayed teeth ; but for the spring of a chronome- 
ter watch, steel is more valuable than gold. Copper is worth 
more per- pound than iron and steel, but many valuable iron 
and steel tools would be worthless for their special purpose 
if made of copper. 

The value of a tool of any kind does not depend on its 
materials, size, form, color or any other quality but one ; viz., 
fitness to perform the work to be done with it. When a tool 
meets the conditions required it supplies a want, and its 
value for that piwpose depends solely on the completeness 
with which the existing conditions are filled by its use. 

VALUE OF A man's SERVICES. 

What is true of things is also true of persons. A man's 
value to society depends on his fitness for the peculiar 
duties he performs, and not on the fact that it would be 
possible for him to perform more important and valuable 
labor. Neither Bismarck nor Gladstone would be of any 
more value to their respective countries than ordinary coal 
heavers, if they did nothing but shovel coal. No matter 
what ofifice a man has latent capacity to honorably occupy^ 
his value to society is measured by the duties he actually 
performs. When his abilities are discovered, and his po- 
sition correspondingly changed, then his importance to his 
fellows and the value of his services are proportionately in- 
creased. This recognition of a particular person's value to 
the community for some special purpose or duty may not 
occur until a late period of his life, and in a vast number of 
cases it never occurs. Such events are a loss to society — ^ 
the relation between the individual and others is not the cor- 
rect one. The proper conditions never occur, and a large 
amount of valuable ability is wasted. Meanwhile some infe- 
rior and incompetent person is placed in a situation where his 
services are comparatively useless because of inability to 



EFFECT OF LA W ON PERSONAL SER VICES. \ 2 1 

properly discharge his duties. Such spectacles are continu- 
ally before us, and show that the value of personal services, 
like the value of other things, is determined by the circum- 
stances and conditions under which those services are placed. 
Circumstances may enhance the value of a man's services or 
they may diminish or destroy their value. 

LEGISLATION MAY CHANGE THE VALUE OF A PERSON'S 

SERVICES. 

Legislation enhances the value of men's services to society 
when procedures are framed into statutes which tend to fill 
offices and positions with those best adapted for them. An 
example of this is seen in the laws of nations, which are 
made with special reference to filling special places with 
men of special ability for those places. 

When a system of laws is enacted which tends to place in- 
competent men in office, the value of a considerable num- 
ber of persons' services is diminished to society. There is 
then more probability that those in public service will not 
each be placed under the most favorable conditions to de- 
velop his full value to the community. More men will be 
in either too high or too low places than under better laws. 

Legislation may also indirectly enhance the value of the 
services to society of certain persons by putting in opera- 
tion means for their education. The Military Academy at 
West Point is an illustration of this. Boys are trained to 
perform special duties. This knowledge confers a special 
value on their services to the nation when they become men. 
Without the sanction and support of law, West Point would 
never have existed. 

HISTORICAL LEGISLATION WHICH AFFECTED VALUES. 

Since July 17, 1861, the United States Government has 
made several financial experiments on a large scale which 
illustrate the effect of legislation on the value of money. 
By acts of July 17 and August 5, 1861, and February 12, 
1862, Congress authorized the issue of sixty millions of Treas- 
ury notes. As first issued these notes were not a legal ten- 



122 SOCIAL STRUGGLES. 

der, except for Government dues. But as they could be 
used in making all payments to the Government, they went 
into general circulation, by common consent, as a medium of 
exchange. By act of March 17, 1862, these notes were 
made a legal tender for all purposes except payment of in- 
terest on the national debt. 

This sixty millions of dollars were received by the Govern- 
ment for all purposes at par with coin. The result was that 
while other kinds of paper money were quoted below the 
par of coin, these notes, throughout the entire period of 
their existence, remained at the same value as coin. This 
arose from the fact that the pieces of comparatively worth- 
less paper which composed them were placed under condi- 
tions similar to the conditions surrounding coin. Their 
amount was limited, and they were legal tender for nearly 
all purposes. 

Having: thus seen the results which certain conditions 
produced on one kind of paper money, let us consider the 
history of an issue of paper money which was legally placed 
under conditions widely different from the sixty millions 
aforesaid. 

Toward the close of December, 1861, specie payments 
were suspended. Bank-notes, nominally convertible into 
coin, on demand, shared the fate which invariably occurs 
whenever national distress causes a serious attempt to ex- 
change such notes for coin. The " honest money " did as 
history tells us it has always done under similar circum- 
stances ; it failed. In the beginning of 1862, after a long 
debate, Congress came to the conclusion that national bank- 
ruptcy was impending, and that it would be impossible to 
carry on the war under the existing system of finance. On 
February 25, 1862, the famous Legal Tender Act was 
passed. That act authorized the issue of one hundred and 
fifty millions of the paper money, since known as green- 
backs, and also authorized the issue of five hundred millions 
of the, so-called, five-twenty Government bonds. 

As the legal-tender act first passed the House of Repre- 
sentatives, the greenbacks were a full legal tender for all 



THE CREATION OF GREENBACKS. 



123 



purposes whatsoever. . This action profoundly aroused and 
alarmed the majority of the great money-lenders. A large 
lobby, composed of representatives of many rich individuals 
and corporations, then appeared before the finance com- 
mittee of the Senate, and threatened that most of the capi- 
talists and leading financial institutions of the country 
would refuse to aid the Government with money to carry on 
the war ; — ^would refuse to buy the Government bonds, un- 
less the greenbacks were shorn of the legal capacity of pay- 
ing the interest on the bonds. Payment of the interest of 
the public debt in coin entailed some provision whereby 
the Government could obtain coin for that purpose. After 
some consideration, the lobby decided to insist that the 
custom, duties should be specially mortgaged for the pur- 
pose of obtaining the requisite coin to pay the interest on 
the national debt. Thus the demands of the lobby con- 
cluded by requiring that the greenbacks should be placed 
under adverse and discredited conditions in two important 
respects, instead of the one first suggested. One false step 
necessitated another. 

A conference committee was appointed by the Senate 
and the House. The majority of the members of that 
committee were alarmed by the arguments and threats of 
the bankers and capitalists. Most of them had no clear 
and definite conception of financial principles, and shared 
the common delusion that the financial wishes and demands 
of bankers were presumptively both expedient and just. 
Therefore this committee voted to recommend that the 
interest on the bonds should be paid in coin, and they also 
agreed that the Government should refuse to receive its 
own notes at the Custom House. Thaddeus Stevens, the 
Republican leader of the House, was a member of that 
committee and foresaw the evil which would inevitably be 
inflicted on the nation by such legislation. As a means of 
calling attention to its want of equity, he made an effort 
to have the soldiers fare the same as the bondholders, so 
far as a payment of the soldier's wages in coin would equal- 
ize the war burden.s borne by those who fought and those 



124 



SOCIAL STRUGGLES. 



who remained safely at home and loaned money at high 
rates of interest. 

But the lobby dictated that the soldier should be paid in 
paper money which was dishonored by its maker, and pro- 
claimed as not good enough to pay the interest due the 
bondholders. 

On the national statute books it was virtually written : 
'^ The rights of men who peril and give their health and 
lives in defense of the country are secondary to the rights 
of those who lend the Government money. . Capital is more 
sacred than human life. The Nation has a right to con- 
script and compel men who are not rich enough to hire sub- 
stitutes, to suffer the privations, disease and death of the 
camp, the march and the battle field ; but there is no right, 
by any means whatsoever, to compel a man to lend money 
for the support of the laws which protect his property. 
Pensions for injuries received in the field can be justly paid 
with money which is not fit to pay interest with." 

Every greenback daily tells the story of this outrage on 
humanity. On its back is inscribed : " This note is a legal 
tender at its face value for all debts, public and private, ex- 
cept duties on customs and interest on the public debt.'' 

This policy discredited the greenback — deprived it of two 
functions which it ought to have filled, and by increasing 
the demand for coin increased the value of coin, and thus 
put it in the power of foreign capitalists to obtain possession 
of our bonds for less value than they otherwise would have 
been obliged to pay for them. The action aforesaid of the 
lobby placed a sickle in the hands of bankers and foreigners, 
who reaped a rich harvest by dealing in United States 
bonds. 

The mistake and the wrong of this measure was not 
merely in refusing to pay the soldiers in coin. All persons 
should have good money. The evil lay in issuing moiiey 
crippled with conditions which diminished its uses, and con- 
sequently diminished its value. 

It has been said that the depreciation of the greenbacks 
was due solely to the issue of so large an amount of them. 



WHAT DEPRECIATED THE GREENBACKS. 



125 



The first greenback was issued March 10, 1862. Before 
that time coin had risen to 104^ per cent. This shows 
that the greenbacks were depreciated before a single one of 
them was printed. Had the greenback been made a full 
legal tender, there is no reason to suppose that the premium 
on coin, even in the darkest days of the war, would have 
exceeded ten per cent. As it was, this premium went so 
high that coin was quoted at one time at 285. On that 
same day, the first issue of notes which were a legal tender at 
the Custom House were quoted at par with coin. 

EFFECT OF THE AFORESAID LAW^. 

This depreciation of the greenback encouraged those en- 
gaged in rebellion against the Government ; increased the 
chances of a foreign intervention, which would have de- 
stroyed the national unity ; and thus not only prolonged 
the war but largely added to the cost of every day of its 
continuance. It is now apparent that the great difference 
in value between the greenback and the first issue of treas- 
ury notes was due to the different legal relations and condi- 
tions borne by those different kinds of paper money. 

WHAT MADE THE AFORESAID LAW POSSIBLE. 

The mistake of not receiving the greenbacks for custom 
duties chiefly arose from the prevalent and curious error of 
supposing gold exempt from the influence of natural laws. 
Every one knows that an increased demand for real estate 
raises its price, and that a diminished demand produces a 
fall in its value. But we acted on the theory that the price 
of gold is not affected by the causes which change the 
prices of all other things. By making coin the sole legal 
tender at the Custom House, we increased the demand for 
it ; this raised its price just as an increased demand for silk 
would raise the price of silk. Refusal to receive the green- 
backs diminished the demand for them ; just as a diminished 
use for fine horses would lessen the demand for fine horses. 



J 26 SOCIAL STRUGGLES. 

A PLEA IN DEFENSE OF THE MONEY LENDERS. 

One extenuating plea, however, should be entered in de- 
fense of the aforesaid traitorous and selfish conduct of the 
lobby of capitalists. Its members, taught by false works on 
political economy, were to a considerable extent under the 
delusion that gold and silver possess a mysterious intrinsic 
value which cannot be affected by legislation. Therefore 
they did not see that legislation which increased the demand 
for coin would inevitably increase the value of coin. Fur- 
thermore, they believed that legislation could not create 
value, and therefore they failed to see that the national need 
of a medium of exchange could be supplied by placing 
pieces of paper under certain conditions : viz., making them 
a full legal tender and limiting their amount. They sup- 
posed that the sole value of paper money under all circum- 
stances arose from the existing degree of probability that 
at some future time it would be received by the Govern- 
ment, and coin given in exchange therefor. They fancied 
that nothing was, or could be, money but coins of gold or 
silver. Ignorant of the fact that the value of all things is 
solely the product and result of conditions, they naturally 
failed to recognize that the value of the greenback would be 
adversely affected if that kind of money were placed under 
adverse conditions by the national Legislature. 

Tremendous evils flowed from incorporating these errors 
into statute law. This exemplifies the necessity of exam- 
ining fundamental doctrines before believing them. We 
should be sure our foundation is solid before we begin to 
build upon it. 

EFFECT OF OTHER LEGISLATION ON PAPER MONEY. 

We have heretofore found that the adverse conditions 
under which Congress placed the greenback at the time of 
its birth were created to satisf}/ the demands of the bankers. 
Those persons for a long time had enjoyed the legal privi- 
lege of issuing their own notes and putting them in circu- 
lation as money at great inconvenience, expense and loss 



LIVING BY THE LABOR OF OTHERS. 127 

to the public, and at considerable profit to themselves. 
They instinctively recognized the proposition to issue na- 
tional paper money as an entering wedge which, if not de- 
feated or neutralized, would ' eventually destroy their an- 
cient legal right to levy tribute on the people. This trib- 
ute was laid and collected in the form of interest on the 
paper money issued, and in the profits made by buying such 
paper money at large discounts at places remote from where 
it was nominally convertible into coin. 

bankers' schemes. 

All human experience teaches that persons who have 
once lived on the toil of others are usually very reluctant 
to abandon such an easy means of support. Over twenty- 
four years have elapsed since the Legal Tender Act was 
framed. From that day to the present time the bankers 
have been continually plotting and contriving some way or 
means to prevent the issue of national legal-tender paper 
money. This opposition to the greenback is carried on 
under the pretense that it is contrary to " financial science " 
for a government to issue paper money. The actual rea- 
son is not only a desire of the bankers to issue their own 
notes as money, and receive interest thereon, but also the 
fact that by destroying the greenback the field for the use 
of bank-notes would be so much enlarged thereby. More- 
over, if all the paper money of the country were issued by 
the bankers, those persons would have more power and 
control over the business interests of the nation. Hence, 
persistent efforts have been made to place in the hands of 
a few men the power to increase or diminish the circulat- 
ing medium of the country in such manner as would best 
promote the selfish interests of those few. 

These schemes have been numerous, but in substance 
have been merely various ways of attaining a common pur- 
pose. To directly suppress the greenback ; to curtail the 
amount of them in circulation, and to surround them with 
adverse conditions and thus diminish their usefulness and 
thereby discredit them in public estimation, have all been 



128 SOCIAL STRUGGLES. 

component parts of one plan. Let us in outline follow 
the history of the greenback, and see how far these attacks 
of its enemies have been successful. 

The principal elTorts made at first to prevent the passage 
of the Legal Tender Act were made by arguments intended 
to show that it would disrupt the nation and array all capi- 
talists against the Government. It was argued that Con- 
gress had no constitutional power to enact such a law, and 
that even if such power existed, making paper money a 
legal tender was contrary to " natural laws " and would 
therefore be a useless and inoperative incumbrance on the 
statute books. These and kindred arguments had but 
little effect. 

Failing to directly prevent the issue of legal-tender paper 
money its opponents then tried to indirectly prevent it by 
a limitation of its legal-tender qualities. As heretofore 
shown, this attempt succeeded. Greenbacks were deprived 
of the legal power to be used in payment of custom duties 
and interest on the Government bonds. 

Human aversion to new things is shown by the fact that 
before the greenbacks appeared a large number of persons 
wondered if they really could be used as money. The 
New York bankers were hostile to them. But they passed 
freely into circulation, and their superiority over the exist- 
ing State bank-notes was soon recognized. It was observed 
that the danger of their being counterfeited was much less ; 
and that, unlike the old kind of paper money, they could 
be taken from State to State and passed without question. 

NATIONAL BANK ACT. 

The bankers saw that the people approved of the green- 
backs and preferred them to the issues of State banks. 
They also saw that the circulation of the greenbacks had 
struck a fatal blow at paper money issued under State au- 
thority. 

They concluded that the most feasible way to retain 
their profitable privilege was to obtain the right to issue 
paper money under national, instead of State authority. 



SUCCESS OF BANKERS' SCHEMES. 120 

Conferences were held, and the final result was that on the 
3d of June, 1864, the National Bank Act was passed. 

That act will doubtless appear to future generations as an 
amazing exhibition of effrontery on the part of those who 
asked for its passage, and of folly in those who enacted it. 
It is along document but its essence is brief. The Govern- 
ment said to the bankers : " Organize as national bankers 
under this act ; for every thousand dollars which you lend 
me at six per cent, per annum, I will lend you nine hun- 
dred dollars at one per cent, per annum." 

Instead of issuing paper money directly to the people 
with little expense in form of greenbacks, without interest, 
it created an expensive machinery for indirectly issuing 
paper money through the hands of bankers. The bankers 
took the money borrowed of the Government at one per 
cent, per annum and loaned it to the people at high rates 
of interest. The issue of national bank-notes inflated the 
currency and thus diminished the value of every greenback 
in circulation. It should be borne in mind that every na- 
tional bank-note inflated the currency as much as so many 
greenbacks would have done, and that a greater total of 
paper money was issued toward the close of the war than 
Would have been had it not been swollen by the national 
bank issues. 

In effect, the National Bank Act was a partially success- 
ful attack on the greenback. By its passage the bankers 
attained three objects : First. They curtailed the amount 
of the greenbacks and thus left a wider field for the use of 
national bank-notes. Second. They came into posses- 
sion of the value created by the law which authorized the 
national bank-notes. This value is broader, and therefore 
greater, than it is possible for State authority to confer on 
paper money. Third. They practically retained their legal 
opportunity to levy a tax on the people without giving any 
adequate return therefor. Every dollar of interest which 
has been paid on national bank-notes is so much money 
stolen from the people under forms of law, from the simple 
9 



I30 



SOCIAL STRUGGLES. 



fact that for every bank-note zvitk interest, a greenback 
without interest might have been substituted. 

SUBTERFUGES. 

Recently the progress made in the reduction of the nom- 
inal amount of the national debt, and the great fall in the 
nominal rates of interest paid by the Government, have 
greatly diminished the profits of the national banks and 
caused a diminution in their circulation. With the extinction 
of the national debt they see an extinction of their opportu- 
nity to issue paper money. Accordingly, each bankers" 
convention brings to light some new subterfuge where- 
by its members hope to continue to get money without 
giving an equivalent therefor. 

As an instructive means of illustrating the effect of 
legislation on value, we have briefly sketched the history of 
the greenback down to the passage of the National Bank 
Act. We found that said act created, for the benefit of 
bankers, value which justly belonged to the whole people. 
The national bankers, by lending the people in form of 
national bank-notes the value created by the people's law- 
makers, have received a large amount of interest. This in- 
terest has been paid by the people on value created by their 
own laws, and properly belonging to themselves. 

"WHY NATIONAL BANK-NOTES HAVE NOT BEEN DESTROYED. 

Why has not the intelligence of the American people, en- 
larged by the discussion which has occurred since 1864, abol- 
ished the national bank-notes and replaced them with 
greenbacks ? 

Three causes have combined to prevent such a desirable 
thing as the extinction of all kinds of paper money but that 
directly issued by the nation : 

First. Bad in principle as the National Bank Act is, in 
fact it is a far less evil than the old system of State banks. 
This is simply because the paper money of national banks 
is placed under better and more uniform conditions than 
the paper money of the State banks was. Instead of look- 



BORROWING MONEY AT ONE PER CENT. PER ANNUM. 



131 



ing forward to see how feasible a still further improvement 
of their currency is, the people have been looking backward 
and rejoicing over the evils from which they have escaped. 

Second. The public press of the large cities has been 
chiefly printed in the interest of the national banks, and 
has not fairly presented the facts to their readers. 

The amount of tax paid by the national bankers has 
been constantly recited as an all-sufficient reason why spe- 
cial privileges should be granted to that class of persons. 
But, on the same principle, the farmers of the country 
could gather statistics showing the amount of tax which 
they pay, and thereupon claim privileges not enjoyed by 
other citizens. 

Third. Congress and the national administration, from 
the close of the war to the present day, with a few excep- 
tional acts, have steadily exerted their influence in favor of 
the national bankers and others of the wealthier classes of 
society. 

ATTACKS ON THE GREENBACKS. 

As heretofore stated, the opponents of the greenback 
sought to prevent the enactment of the legal-tender act by 
urging the unconstitutionality of such a law. Soon after its 
passage, measures were taken to bring the law before the 
United States Supreme Court, in the hope that said tri- 
bunal would declare Congress to have no right in time of 
war to make paper money a legal tender. But a series of 
decisions which affirmed the right of Congress in time of 
war to issue legal-tender paper money destroyed the fond 
anticipations of those who denied the existence of such 
a power, and, at the same time, claimed that no value 
whatever could thereby be created if it were exercised. 

Finally, it was set forth with great positiveness that 
although it might be constitutional in time of war to issue 
paper money and make it a legal tender, yet it was 
clearly unconstitutional to issue paper money as a legal 
tender in time of peace. The slowness with which events 
occur in this world is shown by the fact that over twenty 



J 22 SOCIAL STRUGGLES. 

years elapsed after the passage of the Legal Tender Act 
before its legality was finally passed on by the Supreme 
Court. A full bench, with only one dissenting voice, 
affirmed the constitutional right of Congress at any 
time to issue paper money and make it a legal tender. 

The judge who dissented from the views of his associates 
apparently based his opinion on the hypothesis that leg- 
islation cannot create value, because, if that were so, an 
unlimited amount of value could be created by law. 

This learned judge should also have told us that it 
was impossible for a man to swim, — because if he could 
swim there was nothing to prevent him from swimming 
across the Atlantic Ocean. He should have considered 
that if legislation cannot create value the greenbacks have 
always been worthless, and therefore no decision of the 
Supreme Court could lessen their value. 

The aforesaid decisions of the Supreme Court by re- 
moving all doubt of their legality have placed the green- 
backs on a more assured foundation, and thereby fortified 
their value. Soon after the last named decision was made, 
Senator Bayard, the present Secretary of State, proposed to 
amend the constitution so as to prevent the issue of legal- 
tender paper money. But this proposal, except by the 
friends of the banking interest, was received with derision 
as a device to mold the supreme law of the land in the 
interest of the bankers. 

THE FIVE-TWENTY BONDS. 

As heretofore seen, the lobby who went to Washington 
in 1862 to effect a change in the Legal Tender Act con- 
fined themselves to procuring two limitations, which every 
one can now see on the back of each greenback. " This 
note is a legal tender at its face value for all debts, public 
and private, except duties on customs and interest on 
the public debt!' Nothing is included in the " except " but 
custom duties and interest on the public debt. The 
principal was clearly payable in greenbacks. John Sher- 
man said so, and he denounced any man who should 



WHAT WAS THOUGHT nV 1862. 



133 



ask to be paid otherwise as a " Shylock." Similar views 
were expressed by Benjamin Wade, Oliver P. Morton, 
Thaddeus Stevens, and other leaders of the Republican 
party who participated in the creation of the Legal Tender 
Act. 

The bonds issued under authority of this act were six 
per cent, bonds, and were known as " five-twenties." 

In March, 1864, Congress supposed that money could 
be borrowed at five per cent, if bonds were issued more 
satisfactory to the capitalists than the five-twenty six per 
cent, bonds. Accordingly, the "ten-forty" bonds were 
issued. These bonds bore five per cent, interest in coin, 
and, in compensation for the reduction of interest, the prin- 
cipal was expressly made payable in coin. At the passage 
of that act, coin was at a premium of 160 and was soon quoted 
at over 200. The difference of interest between the five and 
the six per cent, bonds was therefore about two per cent, 
in greenbacks, and for this reason a comparatively small 
amount of these bonds was issued. The great bulk of 
the debt became composed of the so-called five-twenty 
six per cent, bonds, with interest payable in coin and the 
principal payable in greenbacks. 

On the first day of May, 1865, although the war had 
terminated, and the future tranquillity and prosperity of 
the nation were assured, coin was quoted at 145. The 
greenbacks, crippled by legal disability to pay custom 
duties and interest on the public debt, were at a discount. 

The holders of the six per cent, bonds and of the seven- 
thirty bonds, which were convertible into five-twenties at 
maturity, saw that they had made a thrifty bargain with 
the Government. They were entitled to six per cent, in- 
terest in coin, which was equivalent to about eight per cent, 
in greenbacks ; and their bonds were exempt from State or 
municipal taxation. 

DIFFICULTY OF SATISFYING AVARICE. 

But the pleasure of the leading holders of bonds was 
sadly marred by the reflection that although they had 



134 



SOCIAL STRUGGLES. 



made a good bargain for themselves, a still better bargain 
might possibly have been made, in the time of the nation's 
peril and distress, if they had wrongly thought far enough 
and had assurance enough to have availed themselves of 
the opportunity to make a harder bargain with the Govern- 
ment. At the time of the framing of the law creating the 
six per cent, bonds, they were satisfied with its provisions. 
But of all the passions, avarice is most rarely satisfied. 
Other passions may often be allayed by gratification, but 
avarice usually grows more unsatiable in proportion as it is 
supplied with food. 

A HYPOCRITICAL PRETENSE. 

After conferring with each other, and considering the 
best means of placing the country under still greater tribute 
to them, the bondholders concluded to pretend and insist 
that the bargain which they now regretted not making had 
actually been made. In consideration of receiving six per 
cent, interest in coin, and of having the custom duties 
mortgaged to secure such interest, they had agreed that the 
principal of the bonds should be paid in greenbacks. But 
this agreement they now repudiated, and, instead thereof, 
demanded that the written and well understood bargain 
should be so changed as to make the bonds payable in coin. 

PROCLIVITY OF MANKIND TO HYPOCRISY. 

Naturalists and anatomists have devoted much labor to 
pointing out the peculiarities of physical structure, and men- 
tal endowments and traits which distinguish man from other 
animals. But an additional volume could be written in illus- 
tration of the fact that among all the multitudes of animals 
on earth man is pre-eminently the hypocritical animal. 
Man is the only animal that commits a considerable portion 
of the acts of his life under false pretenses. 

Nations are simply aggregations of human individuals. 
National acts are therefore human acts done on such a 
large scale that the mental traits of the different individuals 
are blended in a picture of the average man, whose conduct 



FALSE AND DELUSIVE CRIES. 



135 



is often more easily studied than the acts of one isolated 
man would be. The history of all national crimes tells a 
painfully monotonous story ; i. e.^ as far as it is possible for 
him to do so, man always commits a crime in the name of 
some virtue. England has recently added to the thousands 
of illustrations of this fact. She went into Africa to rob 
the natives, and committed many murders in attempting it. 
But this wretched crime was not done under its true name, 
but under pretext of " maintaining order and extending 
Christianity and civilization." 

England has recently taken formal possession of an im- 
mense tract of land in Southern Africa. But this robbery 
has been committed under pretext of a desire " to benefit the 
native tribes." France once had a war in which the com- 
mon people had the same interest that a flock of sheep has 
in the wrangles of two rival packs of wolves. This war, by 
a refinement of hypocrisy, was styled " the war for the 
public good." 

A multitude of examples similar to the foregoing might 
be cited, all tending to show that the various forms of 
wrongs constantly being committed are almost invariably 
given the name of some virtue by their authors. 

The scheme by which the holders of United States bonds, 
payable in greenbacks, procured legislation making them 
payable in coin reminds us of the long passed war for 
*' the public good." It was carried out under pretense of 
^' strengthening the public credit " and in the name of '' hon- 
esty." If the real nature of this scheme had been generally 
known it would have been defeated ; as it was, the people 
sanctioned it under the delusion that it was what it pre- 
tended to be, — a measure of justice. 

On the first day of August, 1865, the United States debt 
reached its highest point, and amounted to $2,845,907,626. 
In round numbers, by a liberal construction of their con- 
tracts in favor of the bondholders, about one-sixth of this 
vast sum was payable in coin ; the other five-sixths were 
payable in greenbacks, both legally and morally. Coin 
was then at a premium of forty-four per cent. 



136 SOCIAL STRUGGLES. 

MEANS EMPLOYED TO PERPETRATE A CRIME. 

Soon after the close of the war, the bondholders and 
their representatives began to flood the country with state- 
ments and arguments intended to induce the American peo- 
ple to pay the bonds in a manner different from what had 
been agreed upon. These pleas were numerous, but their 
substance can be briefly stated. 

" Honesty is a great virtue. Without money the Government could 
not have carried on the war and the Union would have been divided. 
Disunion would have been a terrible blow to the prosperity of the country. 
The national creditors should be honored for lending money to carry on 
the war, — their services were so great that the nation can well afford to 
pay them, not simply according to the letter of the contract, but as 
their merits entitle them. Let us be honest. The national debt is a 
sacred obligation. If the bonds should be paid according to the letter 
of the contract the public credit would be ruined ; in case of a future 
war no one would lend the Government money, and therefore the nation 
would be ruined. Let us be honest and pay the bonds in coin. Every 
bond is as sacred as a soldier's grave. Honesty is the best policy." 

The above sentiments were amplified into thousands of 
articles and editorials, and millions of copies were distributed 
throughout the country. Every one who ventured to say 
that the rights of public creditors were neither more 
nor less " sacred " than the rights of tax-payers was de- 
nounced as "dishonest." After the discussion had pro- 
gressed for some time it was claimed that the Government 
had actually agreed to pay the bonds in coin. 

The country was flooded with pretended statistics show- 
ing that " the majority of the bonds were owned by poor 
men." Toward the close of the debate several of the, so- 
called, religious papers proclaimed with great positiveness 
the notorious lie that the bonds had been paid for in coin, 
and therefore should in equity be discharged in coin. In 
a country with an extended privilege of suffrage, great 
questions inevitably assume, sooner or later, a political 
aspect. The first national convention which was held 
after the close of the war for the purpose of adopting party 



SUCCESS OF FRA UD. 



137 



principles and nominating presidential candidates, took up 
the question of the proper mode of paying the bonds pay- 
able in greenbacks by the contract when the bonds were 
issued. 

The prospects of the success of the Republican party were 
much the brightest, and the majority of the bondholders 
belonged to that party. Hence, the Republican party was 
chosen as the best instrument to carry out the scheme afore- 
said. The platform of the Republican party declared : — 

" That national honor requires the payment of the public indebtedness 
in the uttermost good faith to all creditors, at home and abroad, not only- 
according to the letter, but the spirit of the laws under which it was con- 
tracted." 

The convention denounced all forms of repudiation as " a 
national crime," and nominated Ulysses S. Grant for Presi- 
dent. This occurred May 21, 1868. 

The Democratic National Convention assembled July 4, 
1868, and declared that : — 

" When the obligations of the Government do not expressly state upon, 
their face, or the law under which they were issued does not provide, that 
they shall be paid in coin, they ought, in right and justice, to be paid ia. 
the lawful money of the United States." 

Horatio Seymour was nominated for President. 

WHY HORATIO SEYMOUR WAS DEFEATED. 

Hundreds of millions of capital were at once arrayed 
against the Democratic candidate, and the majority of vot- 
ers did not understand the real issue. Besides the support 
of the bondholders, the Republican party had the prestige 
of having successfully carried on the war that restored the 
Union. Many persons believed that Horatio Seymour had 
befriended the national enemies. The result of the election 
was the casting of the majority of electoral votes for Ulysses 
S. Grant. Although war issues had been the dominant feat- 
ure of the election campaign, and the financial question had 
not been understood, the result was interpreted as a popu- 
lar decision in favor of paying the bonds in coin. History 



138 



SOCIAL STRUGGLES. 



again repeated itself. A false pretense deceived the people, 
just as they have been misled from time immemorial. 

On the 1 8th of March, 1869, the bonds, which all impar- 
tial persons had no doubt were payable in greenbacks, were 
made payable in coin by an act entitled, " An act to 
strengthen the public credit." Coin was then quoted at 131. 
Two months afterwards it was 142. The preamble to this 
hypocritical law betrays the consciousness of its authors that 
a falsehood was being stated. It begins : 

" In order to remove any doubt as to the purpose of the Government to 
discharge all just obligations to the public creditors, and to settle conflict- 
ing questions and interpretations of the laws by virtue of which such ob- 
ligations have been contracted." 

NATIONAL CREDIT. 

The credit of a nation depends not only on the ability of 
its citizens to pay the taxes requisite to discharge all na- 
tional obligations, but on their ivillingness to do so. If the 
tax-payers, by unjust laws, are called on to pay more than 
they really owe, they are robbed to the extent they pay 
more than the contract called for. The inevitable tendency 
of such unjust laws is to create a public contempt for all 
laws. The aforesaid act should therefore have been named : 
" An act to rob the tax-payers and thereby weaken the foun- 
dation of public credit." For it is certain that a repetition 
of similar acts would eventually result in a public discovery 
of their real nature, and a repudiation of all national debts. 
But laws which deal impartial justice to both tax-payer and 
public creditor can safely be repeated an indefinite number 
of times. 

WHAT EXPERIENCE TEACHES. 

A very considerable number of bond owners who advocated 
the aforesaid change of contract were probably unconscious 
of a desire to cheat the people. But, as all experience 
shows that the most upright judge should not be trusted to 
try a case in which he has a pecuniary interest, it is contrary 
to public policy, and a dangerous precedent, to allow a small 



RESULTS OF RASCALITY. j,q 

number of persons, whose interests are adverse to those of 
the masses, to change an estabHshed mode of interpreting 
contracts. 

EFFECT OF ACT OF MARCH 1 8, 1 869. 

Let us next consider the effect which the above described 
legislation had on values. By preventing the use of the 
greenbacks in payment of the five-twenty bonds, according 
to the original agreement, it diminished the uses to which 
the greenbacks could be put, and thereby, by placing them 
under still further adverse conditions, struck an additional 
blow at their value. 

In fact, the said act was thus a partial repudiation of the 
greenbacks. If they had been used according to the orig- 
inal intent, the demand for greenbacks would have been in- 
creased, and the demand for coin diminished. The inevita- 
ble result would have been a relative fall in the value of 
coin, and a corresponding rise in the value of the greenbacks. 

The act of March 18, 1869, did what its authors ex- 
pected and desired : it increased the value of the bonds 
which previously were payable in greenbacks. This was a 
specimen illustration of a form of legislation which unfort- 
unately is not of rare occurrence. No new value whatever 
was created by the said act ; it merely added value to one 
kind of property, and subtracted value from all other kinds 
of property. In fact, by deranging the relation of things, 
as will hereafter be more fully shown, it actually diminished 
the total amount of value in the country. It also indirectly 
placed an additional tax on the earnings of every laborer in 
the country. It was simply a huge theft committed by 
changing existing obligations into heavier burdens under 
pretense of helping the people by " strengthening " their 
credit. 

WHEN LEGISLATION CREATES VALUE. 

Legislation actually creates value only when, by supplying 
new conditions, some industrial or commercial deficiency or 
want is filled ; or, when some latent wealth-creating force is 



I40 



SOCIAL STRUGGLES. 



thereby evoked or organized. A distinction should be care- 
fully made between the/^w legislative acts which actually 
create value, and the many laws which merely transfer the 
value rightfully owned by one class of persons to another 
class, without giving adequate compensation therefor. 
Whenever legislators neglect to guard the rights of all classes 
of persons with equal fidelity they fail of their duty. By 
enacting laws which increase the value of one man's prop- 
erty at the expense of another man, they legalize robbery 
and repudiate their obligations to recognize the equality of 
all men in the eyes of the law. 

OTHER ACTS OF REPUDIATION AND DISGRACE. 

We have seen that the act of March i8, 1869, was a par- 
tial repudiation by Congress of the contract under which the 
greenbacks were issued to the people. But this was not the 
only act committed by men who in political convention de- 
nounced all forms of repudiation as " a national crime." 
The Legal Tender Act which created the greenbacks said : — 

" And any holders of said United States notes depositing any sum not 
less than fifty dollars, or some multiple of fifty dollars, with the Treas- 
urer of the United States, or either of the assistant treasurers, shall re- 
ceive in exchange therefor duplicate certificates of deposit, one of which 
may be transmitted to the Secretary of the Treasury, who shall thereup- 
on issue to the holder an equal amount of bonds of the United States, 
coupon or registered, as may by said holder be desired, bearing interest 
at the rate of six per centum per annum, payable semi-annually, and 
redeemable at the pleasure of the United States after five years, and 
payable twenty years from the date thereof." 

By the foregoing clause, the United States clearly agreed 
with the holders of certain notes therein described, to allow 
them to fund them at their pleasure into five-twenty six per 
cent, bonds. On the 3d of March, 1863, Congress, suppos- 
ing that a five per cent, bond, with the principal payable in 
coin, would be more advantageous to the Government, and 
be considered more desirable by the people than a six per 
cent, bond with the principal payable in greenbacks, passed 
an act which authorized the issue of five per cent, bonds 
with both interest and principal payable in coin. This act 



ACTS OF repudiation: 



141 



referred to the acts which authorized the greenbacks, and 
said : 

" And the holders of United States notes, issued under and by virtue of 
said acts, shall present the same for the purpose of exchanging the same 
for bonds, as therein provided, on or before the first of July, 1863, and 
thereafter the right so to exchange the same shall cease and determine." 

This repeal of the right to convert greenbacks into five- 
twenty bonds was done for the purpose of inducing people 
to convert greenbacks into the five per cent, bonds. But it 
was a partial repudiation of the right to convert greenbacks 
into six per cent, bonds — a right that was then inscribed on 
the back of every greenback. It placed the greenbacks un- 
der different conditions from those under which they were 
issued. 

The exigencies of the war, however, compelled the Gov- 
ernment to practically resume the sale of five-twenty six per 
cent, bonds at par in greenbacks until the close of the war. 
But the temporary suspension of such sales had an unfavor- 
able effect on the national finances. In fact, this was one of 
the most serious mistakes in the conduct of the war. Water 
never rises higher than the dam which retains it. Had the 
convertible feature of the greenbacks remained undisturbed, 
and had proper efforts been made, all the money needed by 
the Government could have been obtained without the suc- 
cessive issues of legal tenders, which were afterward deemed 
necessary. Whenever more greenbacks were in circulation 
than necessary, they would have been converted into bonds. 

The right to convert greenbacks into five-twenty bonds 
soon after the close of the war would have made the green- 
backs worth as much as coin. At the time when the 
bonds became worth their face in coin, the greenbacks 
would have had the same value if the original contract had 
been kept. 

The Legal Tender Act of February 25, 1862, contained this 
clause : 

" And such United States notes shall be received the same as coin, at 
their par value, in payment for any loans that may be hereafter sold or 
negotiated by the Secretary of the Treasury." 



142 



SOCIAL STRUGGLES. 



The aforesaid clause made a contract which Congress re- 
pudiated on the 14th of July, 1870. An act was then 
passed authorizing the issue of five per cent., four and a 
half per cent, and four per cent, bonds. This act provided 
that in payment for the bonds authorized by it the out- 
standing five-twenty bonds should be received at their face 
value, but, instead of receiving greenbacks at their face 
value, according to the original agreement, it said : 

" The Secretary of the Treasury is hereby authorized to sell and dis- 
pose of any of the bonds issued under this act at not less than their par 
value in coin." 

The act of July 14, 1870, was thus another repudiation 
of the contract under which the greenbacks were issued. 
It placed the greenbacks under still further adverse condi- 
tions, and thereby struck another blow at their value. If 
the greenbacks had been receivable for the bonds, the de^ 
mand for greenbacks would have been increased and the 
demand for coin diminished. The inevitable result would 
have been a relative fall in the value of coin, and a corre- 
sponding rise in the value of greenbacks. 

WHAT MADE THE AFORESAID WRONGS POSSIBLE. 

Two things made this further repudiation of national 
promises possible. 

First. The majority of the " statesmen " who composed 
Congress had not the faintest knowledge of the nature of 
value or of the causes which create it. Second. Such a 
straightforward way of doing business as the reception of 
the greenbacks for bonds, and their consequent increase in 
value, would not have suited the purpose of the compara- 
tively few persons who controlled the financial policy of 
the nation. That purpose was to reduce the wages of 
labor, the prices of the products of labor, and the value of 
all kinds of property except money and bonds, mortgages 
and other evidences of claims for the payment of money. 

On the 15th of July, 1875, in furtherance of said purpose, 
the so-called Resumption Act was passed. Instead of 
changing the adverse conditions under which the green- 



i 



COSTLINESS OF IGNORANCE. 



143 



backs had been placed by the successive acts aforesaid, as 
should have been done, by at once placing them in all re- 
spects on a legal equality with coin, their legal disabilities 
were continued. Ignorant of the simple fact that all values 
depend solely upon conditions, Congress saw no other way 
to place greenbacks and coin on an equality of value but 
to buy and hoard coin for use after January i, 1879, ^^ ^^- 
demption of the greenbacks. 

FRUITS OF CRIME AND FOLLY. 

The result of this act was to increase the demand for 
coin, and consequently to increase its value. This was at 
once made apparent by the fall in the prices of labor and all 
kinds of property, except money and well-secured claims for 
its payment. An element of uncertainty was thus intro- 
duced in the financial and business situation. People we re 
apprehensive of the future, and hoarded their money. The 
currency was thus contracted and the volume of business 
correspondingly reduced. Large numbers of laborers were 
thrown out of employment, and the production of wealth 
throughout the country was thereby greatly diminished. 
Numerous bankruptcies occurred, and an army of tramps 
sprang into existence and began to menace the security of 
property. On February 28, 1878, alarmed at the growing 
and threatening consequences of their criminal folly, Con- 
gress passed an act for the coinage of silver. This act, al- 
though seriously defective, produced one good effect imme- 
diately. It showed business men that the contraction of 
the currency to a gold basis was temporarily and partially 
arrested, and that less immediate danger from that source 
existed. 

After the ist of January, 1879, the greenbacks, although 
not legally on an equality with coin, were practically so 
placed. The result was that the anticipated enormous de- 
mand for coin did not occur, simply because the conditions 
surrounding the greenback, being practically the same as 
those surrounding coin, few persons cared to exchange 
them for coin. Distrust of the future was removed and 



144 



SOCIAL STRUGGLES. 



business began to revive. After suffering unnecessary and 
enormous losses through the derangement of business and 
idleness of machinery and labor, we finally reached the 
point we might have attained soon after the close of the 
war if our legislators had comprehended the fundamental 
principles which govern the creation of value, and had 
made laws, not for the aggrandizement of a class, but for 
the welfare of the whole people. 

We have now seen that successive laws have been enacted 
without proper reference to their effect on values. It is, 
however, a mistake to say that these laws were enacted in 
the interest of " capital." They were in fact formed in the 
interest of a particular kind of capital ; viz., money, and 
documents calling for its payment. These ill-advised meas- 
ures, by deranging business and throwing vast numbers of 
workmen out of employment, subjected the nation to great 
hardships and enormous losses, which might have been 
mostly averted by judicious laws. 

VIEWS OF A SO-CALLED STATESMAN. 

In reply to the aforesaid criticism one of the United 
States senators has been applauded for saying that : — 

" When a labor is to be performed, or a burden borne, it makes but 
little difference how it is done ; the great thing is to do it." 

Just as ignorant people imagine the skill of a physician 
is measured by the nauseous nature of his prescriptions and 
their unpleasant effects, many " statesmen " suppose that 
the suffering's attendant on bad financial measures are nee- 
essary and inevitable. Furthermore, they assume that 
a great amount of industrial and business derangement 
betokens the wisdom of the laws which produce it. 

SIMPLE FACTS OVERTHROW FALSE THEORIES. 

Two roads may finally lead a traveler to the same place. 
But, one of these roads may be straight and easy, while 
the other is crooked and very dil^cult and dangerous. 
A little reflection ought to convince any one that the 
manner in which a particular thing is done often deter- 



NEED OF GREA TER INTELLIGENCE. 



145 



mines whether it is an easy or an onerous task. A journey 
from New York to Chicago with eighty pounds of baggage 
is not a difficult thing when made in a raih'oad car; but if 
it had to be performed on foot with the baggage carried 
on the back it would be quite an undertaking. A man 
can put a hundred-pound keg of nails on a wheelbarrow 
and wheel it over a good road a mile with compara- 
tive ease ; but to put it on his shoulder and carry it a 
mile would be quite a different thing. A farmer can easily 
get rid of the rats in his wheat stack by setting fire to it ; 
but such a course would add to the numerous cases in 
which the remedy is worse than the disease. Numberless 
examples might be given to show that it is not always the 
result accomplished which makes a hardship, but the nianiier 
in which that result has been reached. 

Instead of assuming that social and industrial derange- 
ment is inevitable, and resigning ourselves like fatalists, 
we should remember that such an event is always the 
result of some form of ignorance, and set to work to 
find out what it is and how to apply a remedy. It is easy 
to deceive ourselves with the pleasant belief that our knowl- 
edge is perfect and that our misfortunes have not arisen 
from our own folly. 



CHAPTER VIII. 

Value; a Clear Understanding of its Nature Indispensable. — How to 
Study Value. — Location apparently affects Value. — Creation of Value 
by Transportation. — Effect of Time in Creating Value. — Difference 
between Value and Weight and Measure. — Change of Place not the 
Real Cause of Changes in Value. — Men change Values by Time^ 
Place and Mode of Sale. — A Merchant's Success. — The Essence of 
Value. — Intrinsic Value.— Changes in Value in Consequence of 
Changes in Circumstances. — The Result which Creates Value. — Un- 
usual Values. — Value of Water. — Changes of Value are always 
wrought by the same Law. — How Value is Diminished. — How Value 
is Increased. — What gives Stability to Values. — Common Idea of the 
Cause of Value. — Why Land has Risen in Value. — Why Personal 
Property changes in Value. — Effect of Law on the Value of Gold and 
Silver. — Things do not possess Two Values.^Exchangeable Value. 
— Final Analysis of the Nature of Value. — Different Amounts of 
Value Created by the Same Amount of Labor. — Why Labor does not 
Always Create Wealth. — How We state Value. — Distinction between 
Value and Inherent Qualities. — Value not an Intrinsic Quality. — Leg- 
islation has no Effect on Intrinsic Qualities. — A Prolific Error.^ 
What is Necessary to the Existence of Value. — Value is always Re- 
lation. — Only one Way to learn the Nature of Value. 

Value is not a quality ; it is a result of circumstances. 
When a person with a certain zvant is placed in possession of a 
thing whose intrinsic qualities meet, gratify and fill said 
want, value is created. The degree, the amount, of value thus 
evoked depends on the intensity and importance of the want 
and the difficulty of otherwise supplying it. 

The difificulty which obstructs progress in studying polit- 
ical economy is similar to that met in the study of all other 
subjects. It is more or less impossible to fully understand 
one branch of any subject until all other portions of that 
subject have been mastered so that the relation of one thing 
to another can be surveyed at a glance. As only one thing 
can be learned at a time, we have no alternative but to first 
study the different parts of a subject separately, and then. 

146 



NEED OF KNOWING WHAT VALUE IS. 



147 



turn back and pass the whole ground over again with the 
help of the light afforded by the preliminary process of 
studying one portion after another. Thus it is impossible 
to comprehend any social problems fully without a clear 
understanding of what is described by the term " value." 
But " value " can only be fully understood by a person 
familiar with the motives which lead men to exchange 
things with each other, and the mode in which these ex- 
changes are made. 

That the nature and attributes of value be correctly un- 
derstood is of the utmost importance, because every portion 
of the topics we are considering has a direct relation to 
value. A work on political economy might truly be enti- 
tled : " A description of the laws which regulate the crea- 
tion and distribution of value." The definition of value 
therefore describes fundamental facts and principles. The 
greater portion of all financial theories and systems must 
consequently hinge on the manner in which it is understood 
that value can be created or destroyed, and on what the es- 
sence of value itself is believed to be. 

HOW TO STUDY VALUE. 

Heretofore we have partially considered the nature of 
value. Let us now carefully dissect the meaning of the 
word " value," and see if we can definitely and fully ascer- 
tain precisely what value is, and what it is made of. 

The word " valuable " is an adjective which is placed be- 
fore names to denote that a designated thing possesses util- 
ity, worth, usefulness, or the power to gratify and satisfy 
fancied and actual necessities and desires. Thus we say: a 
valuable farm, a valuable cow, a valuable coat, a valuable 
house ; thereby meaning to convey the idea that the named 
things possess qualities which render their ownership desir- 
able, — that they are forms and kinds of wealth. The term 
valuable literally means something which contains, brings 
or represents value. We now wish to find out just what the 
thing itself is which valuable goods and valuable property 
contain or possess. We cannot discover it by sight, nor by 



148 



SOCIAL STRUGGLES. 



any other one of the senses ; neither can we learn anything 
about value by breaking a valuable thing in pieces, or by 
subjecting it to any chemical test. But the failure of such 
tests to reveal the nature of value does not prove that it has 
no existence, because we know that the nature of many 
other things cannot be so determined, but must be ascer- 
tained by comparative reasoning. Therefore we are forced 
to study this invisible thing by reasoning from facts which 
we know have a relation to it. 

LOCATION APPARENTLY AFFECTS VALUE. 

In beginning this investigation, the first thing which at- 
tracts our attention is the fact that the same thing has a dif- 
ferent value in different places. In some things the differ- 
ence in their value caused by locality is comparatively 
small, — in other things very great. 

Between these two extremes there is every gradation ; 
but, in everything whatever, we invariably find that the 
same thing in one country has some degree of difference in 
value from what it has in another. These differences are 
most noticeable in proportion to the distance of one place 
from another, and the contrast between the surroundings, 
wealth, habits, occupations and industrial and mental devel- 
opment of the inhabitants of those places. Thus we find 
that the same things which have little value in South Amer- 
ica, Asia and Africa are considered much more valuable in 
London, Paris, or New York. On the other hand, we find 
that many things become much more valuable if taken from 
the world's great centers of wealth and transported to other 
climes and nations. Furthermore, we observe great differ- 
ences in the value of the same things in the same country ; 
some things being frequently worth several times as much 
in one place as in another. Even where places are within 
fifty miles of each other, we often find that a thing has one 
value at one place, and another, and a very different value, 
at another place. 

Furthermore, we observe that a considerable number of 



CHANGE OF PLACE— CHANGE OF VALUE. i^q 

things are of no value in one location, and of considerable 
value when removed to another spot. 

A ship's crew, ice-bound in the Arctic seas and certain of 
being obliged to remain there for several months, would not, 
if they could, sell their stock of coal for one thousand dol- 
lars a ton. Near the ship may lie a mountain of ice which 
is of no value whatever to them. But change the conditions 
and relative position in which both coal and ice are sit- 
uated, — place them both in New Orleans. The crew would 
then be willing to sell their coal for a comparatively small 
price, while the ice would become very valuable. 

CREATION OF VALUE BY TRANSPORTATION. 

Having become convinced that changes in the location, 
surroundings and conditions under which things are placed 
alter their values more or less, we naturally ask : If the 
value of a thing can be enhanced by changing its location 
and surroundings, does not such a change actually create 
value? If coal which is worth only one dollar a ton at the 
mines be taken to a place where it is worth five dollars a ton, 
have not four-fifths of the value of that coal been created 
by placing it under different conditions? Reflection on 
the above and kindred questions compels us to answer 
them in the af^rmative. 

But our curiosity is excited, and we are impelled to ask: 
If value can be created by changing the location and cir- 
cumstances in which things are placed, why do not men 
who desire gain engage in the business of moving goods 
from place to place in such manner that a material change 
will be wrought in the conditions which environ them and 
thus enhance the value of those goods? The more we re- 
flect upon this question, the more feasible such a scheme 
appears; when, lo ! it dawns upon us that the aforesaid 
mode of creating value and getting gain is exactly what a 
very considerable part of the human race have always been 
industriously engaged in. 

At first, men learned that more value could be had for the 
few simple things they had for exchange by carrying them 



ISO 



SOCIAL STRUGGLES. 



on their backs over rude foot-paths to another tribe who 
were not as well suppHed with those things as themselves. 
In course of time mankind had a greater number and va- 
riety of things for sale and exchange, — they tamed animals 
and made paths suitable for beasts of burden to travel over, 
and then the business of making things more valuable by 
moving them from one place to another became more 
extended and important. Progress went slowly on. 
Wheeled vehicles were invented, and then the need of bet- 
ter roads over which to draw loads of goods from one place, 
where cheap, to another place, where more valuable, be- 
came more obvious and imperative ; roads were made better 
and in greater numbers ; hills were cut down, morasses 
filled, streams bridged, and all the cultivated lands and 
cities placed in easy communication by earth roads. 

But this did not satisfy the desires of shippers of goods. 
Within a century, a new instrumentality has been invented 
whereby the value of things can be enhanced by cheaply 
and rapidly transporting them any distance required. The 
railroad and the steam locomotive now connect all the 
commercial and industrial centers in this country, and in 
each nation of Europe, by tens of thousands of miles of 
road ; and even in Asia and South America an immense 
length of railroad is in operation. 

The postal service, the telegraph, huge warehouses equip- 
ped with hoisting machines, steam-engines, ponderous 
trucks drawn by powerful horses, and a variety of other 
potent aids to the work of creating value by the transporta- 
tion of goods are in constant use. 

We also find that the carriage of goods by water has 
passed through the same stages of growth as land trans- 
portation. Instead of timidly creeping along the shores in 
little boats as our ancestors did, we now place the goods 
which are cheap in one continent on board a huge ship and 
steer straight across the ocean to another continent, where 
we know the same things have a greater value. We have 
dug canals, built docks, lined the ocean shores with light- 



MAN HAS AL WA YS BEEN A TRANSPORTER, 



151 



houses, and dotted every sea with sails and with the trailing 
smoke of steamers. 

From the time when a few skins or other simple commod- 
ities were carried in rude canoes, or on the backs of men 
or beasts, from one place to another, for the purpose of in- 
creasing their value, down to the present, when an enor- 
mous net-work of organized commerce is spread over the 
world, we find in every period a universal and practical be- 
lief that under certain conditions the value of things 
can be raised by transporting them from one market to 
another. 

A large portion of history, the story of man's efforts to 
satisfy his wants and gratify his desires, is merely a record 
of inventions and attempts made for the purpose of creating 
or discovering some means or route whereby the location 
and surroundings of goods could be more easily changed, 
and the creation of value and the acquisition of gain more 
readily and certainly accomplished. 

Only a short time has elapsed since, at great cost, the 
Suez Canal was completed, for the sole purpose of making a 
means whereby the location of goods in Asia and Europe 
could be more easily changed. At enormous expense a 
canal is now being built across the Isthmus of Panama. 
This, like great numbers of other works, is simply a step 
whereby the creation or increase ot value by moving goods 
from place to place can be effected with less difficulty. 

In some cases we find a change in the locality of a thing 
affects its value comparatively little ; in other instances, 
the entire value is dependent on its being transported from 
where nature placed it to another spot. Ice is of no value 
while lying in northern waters, and of considerable value 
when carried to southern cities. Immense quantities of 
the finest building sand lies on beaches where it is not 
worth one cent a ton. But if this worthless sand be placed 
under different conditions by being carried to an inland 
city where sand is scarce it becomes quite valuable. Coal, 
iron, building-stone and many other things are almost with- 
out value when lying in their natural beds, but become of 



152 



SOCIAL STRUGGLES. 



great value when their relations to mankind are changed 
by transportation to a place where a greater number of 
persons desire to own and use them. The emigration of 
laborers and mechanics from one place to another is due, to 
a considerable extent, to the fact that labor, like every- 
thing else which is bought and sold, has different values in 
different countries ; and, even in different portions of the 
same countries, labor sells for different prices. 

EFFECT OF TIME IN CREATING VALUE. 

We have now seen that place seems to be an essential ele- 
ment of value. Upon further reflection we find that time 
is another factor which apparently often largely determines 
the value of a given thing. Merchants buy commodities at 
one time and keep them until another time, when they ex- 
pect their value will be greater. Dealers in real estate buy 
land at one time with the idea of keeping it until another 
time. Speculators in stocks and alt kinds of other things 
are continually basing their calculations on the changes 
which time will make in the value of whatever they are 
dealing in. 

The market reports of the prices of grain are a familiar 
illustration of this. Wheat, for instance, is quoted at one, 
price if to be delivered in May , and at a different rate if to 
be delivered in October of the same year. The price of 
labor varies in the same place at different seasons of the 
year. This is especially noticeable in farming regions. 
Laborers get much higher prices in harvest time, for the 
same amount of exertion, than at other portions of the year. 
The enhanced wages are due to the time at which the ser- 
vices are rendered. 

DIFFERENCE BETWEEN VALUE AND WEIGHT AND 
MEASURE. 

The foreg-oing considerations show us that value is 
entirely different from weight and measure. An elephant's 
tusk, which is four feet long and weighs twenty pounds, will 
be just as long and just as heavy no matter to what part of 



CHANGE OF PLACE CAN DESTROY VALUE. jro 

the world we carry it. But its value will depend on the cir- 
cumstances in which it is placed. Neither time nor place 
affect the weight and measure of a thing ; those qualities 
cannot be changed without essentially changing the thing 
itself. But the value of a thing can be raised to several 
times its original price, and afterward reduced to nothing, 
without changing its material qualities in the slightest de- 
gree. 

S has a thousand loads of paving-stones piled up in a 
city, where they are worth two thousand dollars. They 
were brought there from a stony farm, where they were 
worthless. If S send these stones to a place where no one 
wants them, their value is gone ; but they will weigh and 
measure just as much as ever. 

CHANGE OF PLACE NOT THE REAL CAUSE OF CHANGES 
IN VALUE. 

The last example illustrates another important fact ; viz., 
while place is usually the apparent reason why a thing 
which is shipped from one point to another is raised or 
lowered in value it is never the real reason. If it were, a 
movement of things from one place to another would al- 
ways alter their value. But such is not the fact. Coal 
might be taken from the mines of one country and brought 
thousands of miles to the coal mines of another country, 
without having its value altered by such a change. 

What is true of place is also true of tivie : it is often the 
apparent, but never the real reason for a change in the 
value of a thing. A thing may have the same value on 
dates separated by months or years. 

The actual reasons which change values are alterations in 
the conditions under which a thing is placed, — changes in 
the relation which it bears to mankind and to surrounding 
things, facts and circumstances. Time and place are merely 
instrumentalities Avhich are often used to produce those 
changed conditions, and place a certain thing under circum- 
stances, or in a location where it will be in greater demand, 



154 



SOCIAL STRUGGLES. 



and therefore have a greater value because its relative im- 
portance will be increased. 

MEN CHANGE VALUES BY TIME, PLACE AND MODE 
OF SALE. 

The dealer in stocks says to himself: "At this time 
stocks are cheap because money is difficult to obtain, and 
the majority of persons are frightened. I will buy now and 
hold my stocks until the business outlook has altered — until 
money is plentier and the community full of hope. I will 
buy in a market clouded by general distrust ; I will sell un- 
der different circumstances. Time will bring these changes 
about." The dealer in land acts from reasoning akin to 
that of the stock dealer, and thus concludes : 

" Here is a tract of land which is now within one mile of the center of 
a city of twenty thousand inhabitants ; within ten years it will be within 
one mile of the center of a city of forty thousand. Its present price is 
for existing conditions. Altered conditions will alter its value. I will 
invest my capital here and help build up this city." Or, he may say: 
" This land can be bought low, because it has no side-walks, sewer, 
water, gas, or railroad near it. I will buy the land as it is and, after 
making requisite improvements upon and near it, will then sell under 
better conditions and with an augmented value." 

By such acts, real-estate dealers do not merely sell at a 
higher price than they paid. They achially create the value 
which causes the land to command a higher price. 

The dealer in coffee says : " Coffee is worth so much in 
New York and so much in Rio Janeiro. A handsome profit 
can be made by purchasing coffee in Rio Janeiro and carry- 
ing it to a different market, to a place where there is less 
coffee and more persons who want it." 

Trains of reasoning similar to those above cited are em- 
ployed by all dealers who intelligently conduct their busi- 
ness. The transportation of goods from place to place, 
like the buying of things at one time for the purpose of 
selling them at another, are merely agencies through which 
certain results are expected to follow. All dealers endeavor 
to make a profit by purchasing certain things in a market 



WHA T A TRADER'S SUCCESS DEPENDS ON. 



155 



where the conditions tend to produce a low price, and then, 
by the aid of time, distance, or a mode of sale different from 
that by which the purchase was made, bring these same 
things to a different market, to a market where the condi- 
tions will be likely to give them a greater value. 

At first sight, it appears as if the great majority of shop- 
keepers got their profits without enhancing the value of the 
goods dealt in by making changes in the conditions sur- 
rounding those goods. But a little examination shows that 
these merchants, in essence, pursue the same course that a 
merchant does who buys in England and sells in Mexico. 
They buy in the wholesale, and sell in the retail market. 
Goods sold at wholesale are sold under materially different 
conditions from goods sold at retail. Hence, goods bought 
of a wholesale dealer, and then divided into small parcels 
and sold at retail, have their conditions, and consequently 
their value, considerably changed. That is, the value of 
each pound, yard, or quart of goods sold at retail is 
greater to its purchaser than it would be if he were obliged 
to buy a large amount of the same thing. This is so be- 
cause the portion bought supplies the customer's wants, — 
it is adapted to his condition and circumstances, and there- 
fore has a greater relative value to him than a large amount 
of the same thing would have. 

All mercantile and commercial transactions are con- 
ducted on the principle of changing, in some form or 
way, the conditions and circumstances of the property 
dealt in. These changes are created, or are expected to 
occur, by and from a great variety of means and methods. 
But the principle underlying them is always the same. 

A merchant's success. 

Leaving out of view the fortuitous events which are 
usually called " luck," the success of these endeavors de- 
pends on the accuracy and breadth of the merchant's 
knowledge, the soundness of his judgment, his pecuniary 
resources, the amount of trust reposed in him by owners 
of property, his alertness in seizing opportunities, and his 



156 SOCIAL STRUGGLES. 

skill in conducting the practical details of the enterprises 
he may engage in, and advantageously changing the con- 
ditions surrounding his goods. 

THE ESSENCE OF VALUE. 

We nave now learned that all mankind, practically if not 
theoretically, agree that the value of things is largely depend- 
ent on the conditions under which they are placed. Further- 
more, we have found that value can be created, increased, 
diminished, or destroyed without making the slightest mate- 
rial alteration in the thing which contains or possesses it, 
simply by changing the relation of a thing to mankind, and 
the attendant facts and circumstances. But we have not 
yet found what is meant by the word "value," nor what it 
essentially consists of. As neither physical nor chemical 
examination will reveal anything, we are forced to continue 
to analyze it by reasoning from known facts. We must 
follow the same method we use when considering the nature 
of " justice," or any other thing which cannot be weighed, 
measured, and handled. 

Having learned that altered circumstances create changes 
in the amount of value which a given thing possesses, 
the next natural step is to inquire whether value ever 
exists absolutely, without any dependence whatever on 
circumstances. If it be possible for anything or things to 
contain or possess absolute" value, then that or those things 
will always be prized highly, sought for and considered 
desirable and valuable by one man, or by a hundred men, 
no matter what the situation, condition and circumstances 
of that man or those men may be. 

INTRINSIC VALUE. 

The question consequently arises : Are there any things 
which are valuable to a man at all times and under all 
circumstances? If so, then those things are not dependent 
on any circumstances, facts or conditions whatsoever in 
order to be valuable, but they actually contain and possess 
absolute, intrinsic and unchangeable value. Furthermore, 



WHAT INTRINSIC VALUE WOULD BE. 



157 



the possessor of those things, under all circumstances 
and conditions whatsoever, is better off than if he did not 
possess them. 

But, if no such things can be found, then it necessarily 
follows that value is dependent entirely on, and is the 
creature of circumstances and conditions. 

In commencing to search for a thing which contains 
intrinsic value we naturally turn first to those things which 
are usually considered most valuable ; viz., gold, silver 
and diamonds. At the outset we find a universal testi- 
mony that the ownership of those things is usually deemed 
so desirable that mankind often voluntarily undergo great 
labors and privations to obtain it. But our search is not 
for something which generally and under ordinary con- 
ditions has value, but for something which invariably has 
value. The question whether gold, silver and diamonds 
possess intrinsic value can therefore only be solved by an 
answer to a kindred question : Can a man be placed under 
circumstances in which those things are of no value to 
him whatever? Does not, their ownership always bring the 
benefits derived from the favorable conditions described 
and conveyed by the term " wealth " ? 

CHANGES IN VALUE IN CONSEQUENCE OF CHANGES IN 
CIRCUMSTANCES. 

The slightest reflection shows that a great variety of 
conditions are possible, and often exist, which render 
those things of no value whatever to a man, simply be- 
cause under such circumstances he cannot derive any 
benefit or advantage from owning them. Suppose a man 
has in possession a large amount of silver, gold and 
diamonds, and at the same .time is suffering from, and in 
danger of perishing of thirst, of starvation, of cold, or of 
wounds or disease. Further suppose, as not infrequently 
happens, that his surroundings and condition are such 
that he is utterly unable to exchange his goods for the 
things which will supply his necessities or relieve his 
sufferings. Is it not evident that those things would 



158 



SOCIAL STRUGGLES. 



then be of no value whatever to their owner? Remote 
from aid, men occasionally perish of thirst, cold and star- 
vation, which the possession of millions at the time would 
not have averted. All around us rich men are constantly 
falling into conditions in which what was their wealth loses 
all value to them. They are in a condition similar to 
that of a man perishing of thirst in the desert, sitting on 
a pile of gold and diamonds, with no possibility of succor. 
They are dying of disease, and all the things in the world 
usually called " valuable " are of no value to them, from 
the simple fact that their ownership does not supply 
imperative wants and desires. 

Some persons may say that the aforesaid examples are ex- 
treme cases, and therefore do not truly represent the facts. 
But it must be remembered that the existence of a law is 
not disproved, or affected in the slightest degree, by 
showing that the results of its workings are often un- 
noticed. The fall of a feather attracts little attention ; 
the fall of a thousand tons a great distance creates a 
vivid impression on the beholder. But both these events 
are due to precisely the same cause, — the law of gravita- 
tion. Natural laws are universal and perpetual. They do 
not apply to one class of cases, and, at the same time, have 
no operation or effect in precisely similar circumstances. 
The law which governs value does not differ in the least 
from the laws which relate to all other subjects and things : 
it is universal and perpetual ; it regulates all gradations of 
value, from the lowest to the highest, and it operates just as 
inevitably and effectually in ordinary cases, which do not 
attract general attention, as it does where striking results 
are produced. 

If we are compelled to admit that gold, silver and dia- 
monds have no intrinsic value — that is, no value independent 
of certain conditions which are requisite to confer value 
upon them — we still find it hard to believe that the value of 
all things is due to outside influences instead of to something 
inside of them. In other words, we have difficulty in be- 



VALUE IS CREATED BY CIRCUMSTANCES. 



159 



Heving that a universal law decrees that all value is extrinsic 
and not intrinsic. 

Consequently we ask : Have not bread, meat and kindred 
nefcessities intrinsic value to a man ? Are they not always 
useful and therefore valuable without the slightest regard 
to circumstances ? Is not wheat, for instance, a synonym 
for value because it actually contains valuable nourishment? 

After carefully pondering on the above crucial test ques- 
tions we are compelled to answer in the negative, from the 
simple fact that a man maybe in a condition in which those 
things are of no use to him. A thing is of absolute value to 
a man only when the attendant circumstances are such as to 
create a coincidence between the wants of the man and the 
peculiar qualities of the thing. To a man suffering from ex- 
cessive heat, a cool place and abundance of cool drinks are 
of value ; but if a person is shivering with cold his ideas of 
value are warm clothing, shelter from the cold wind, fuel 
and warm drink and food. Large sums are continually be- 
ing paid to musicians, but a person with a dislocated arm 
would not be in the mood to attach any value to an opera 
ticket : he would think a surgeon's services of more value 
than the melody of the finest musicians in the world. 

A coat would not be of as much value to a barefooted 
man, well clad in other respects, as a pair of shoes. Un- 
commonly warm clothing is of great value to a person in the 
Arctic regions. Except during a few days in the year, cloth- 
ing suitable for the Polar region is of no value to a man living 
in the temperate zone ; and, to an inhabitant of the tropics, 
such clothing is worthless, unless possibly he can ship it to 
a cold country. Thus we see that the value of clothing de- 
pends on its meeting and supplying the wants of its owner ; 
and the amount of this value depends largely on the extent 
and completeness with which an imperative need is supplied. 

THE RESULT WHICH CREATES VALUE. 

Illustrations similar to the above might be given indefi- 
nitely, all tending to show that value is created only by the 
meeting of a want with a means of supplying it. The value 



t5o SOCIAL STRUGGLES. 

of a thing is consequently determined by the degree in which 
it supplies a want. Therefore, of necessity, nothing can 
have inherent, intrinsic value ; the value of a thing is only 
called into existence by a combination of conditions and 
circumstances which enables and causes that thing to supply 
a want. 

UNUSUAL VALUES. 

Ordinary conditions produce an ordinary amount of value 
in a given thing. Extraordinary conditions may change the 
usual value of a thing to an extraordinary state, and this 
change may be either an entire creation, an increase, a 
diminution, or a total destruction of its value. These ex- 
traordinary values seem wonderful to us, but an examin- 
ation of the matter shows that no new laws or mysteri- 
ous forces have produced them. They are created by 
precisely the same laws which give an ordinary value to a 
thing under ordinary circumstances. A gentle breeze is 
caused by the same laws which create tornadoes ; — the dif- 
ference between them arises from different combinations of 
facts under which those laws set the air in motion. When 
the result of a law's operation attracts our attention vividly, 
we usually forget that those marked effects are simply an 
exhibition of forces constantly at work under different cir- 
cumstances and then almost unnoticed. We are not much 
impressed by stroking a cat in the dark and watching the 
electric sparks from her fur ; but the same electrical law is 
then in force as when the heavens are shaken with thunder 
and lightning. 

VALUE OF WATER. 

The foregoing statements may be exemplified by reference 
to the value of water pure enough for drinking and other 
domestic purposes. Under ordinary circumstances, water 
has but little value, — a small sum of money, or a small 
amount of labor, will procure all that is requisite for the 
constant supply of a family. But events often occur which 
render a small amount of water of great value ; the price of a 



WHEAT WATER IS VALUABLE. jgj 

gallon of water under some circumstances, if it could 
thereby be bought, would equal the entire wealth of the 
purchaser. From this extreme, there is every gradation of 
^the value of water down to the point where vast rivers of it 
fiow along where no one even imagines that water may have 
value. 

In a valley high among wild hills lies a small deep lake 
fed by living springs and streams. For centuries it has 
lain there without any inhabitant of its vicinity dreaming 
that its ten thousand acres of area were worth as much 
as ten acres of fertile land. But within a few years a city 
has arisen, forty miles away, with no water supply in its 
neighborhood adequate to its present and prospective 
needs. A few far-sighted persons comprehend that a con- 
dition of facts exists which sooner or later must inevitably 
confer a great value on the waters of that lake. They 
quietly buy the lake, with a large amount of surrounding 
wild land, and then give all the residents of that city infor- 
mation that an abundance of good water, at a moderate 
cost, can be had from it. A water company is formed, — 
■the water is made to supply the citizens with an abundance 
of good water at a low charge, and a large amount of value 
is thereby created. A want and a supply have met. The 
water which a short time before was considered of no value 
is now deemed, by careful capitalists, a desirable kind of 
property, because they see no probability of any circum- 
stances ever arising which will lessen the demand for it and 
the income from its sale. No change whatever has taken 
■place in the amount or quality of the water. The change 
of value is entirely due to the fact that the relation of the 
water to mankind has been changed, — a new and entirely 
different condition has been created — a new use has been 
given to the water. 

CHANGES OF VALUE ARE ALWAYS WROUGHT BY THE 

SAME LAW. 

There is nothing exceptional in the foregoing case ; the 
change of value was wrought by an unvarying universal 



l62 SOCIAL STRUGGLES. 

law which operates precisely the same in all cases without 
the slightest reference to the amount of attention its 
results may attract. The principles involved in the creation 
of a million dollars' worth of value are precisely the same as 
those which convert a worthless load of sand into one dol- 
lar's worth of building material. A certain change of cir- 
cumstances and facts must occur, and the judgment of man- 
kind on the result of that change constitutes what is meant 
by the word "value." 

As surrounding conditions and the relation of things to 
mankind change, the judgments and estimates formed and 
made of their value must also change. This explains the 
changes which are constantly taking place in the value of 
various things. The conditions and circumstances sur- 
rounding them change, and more or less changes in value 
occur, in proportion to the altered conditions. 

HOW VALUE IS DIMINISHED. 

A machine for a given purpose may be valuable because 
it exists under conditions in which it supplies a want far 
better than any other machine. But the invention of a 
better one may wholly destroy its value, simply because 
the new machine radically changes the conditions under 
which the old machine was valuable. In this way, old 
tools and machinery of various kinds are constantly being 
made comparatively worthless by the invention of better 
ones. A vast amount of value in the world now exists in 
the form of steam-engines. But it is not " intrinsic " value. 
The discovery of a new mode of generating force — more 
efificient and economical than steam, would change the 
present conditions under which steam-engines are valuable 
and render them almost worthless. In like manner, the 
value of all other kinds of property may be more or less 
diminished by inventions and events that would change the 
conditions which now give them value. If the value of this 
property were intrinsic, no changes of circumstances would 
or could affect it. 



INCREASED NEED, INCREASES VALUE. jg, 

HOW VALUE IS INCREASED. 

On the other hand, just as circumstances may diminish 
or destroy the value of a thing, events may increase its 
value. Whenever the amount of a certain thing; in the 
world, or at a certain place, is limited, and it is either very 
difficult or impossible to create more of it, then such a 
thing is largely enhanced in value by conditions which 
increase the demand for it. For example : the land on 
Manhattan Island is limited in amount ; the growth of the 
United States has made it the commercial center of a great 
nation ; an increased demand for it and an enhanced value 
are the results of these changed conditions. 

Gold is so limited by nature that it is difficult to increase 
its amount. The demonetization of silver by several na- 
tions has increased the demand for gold. The conditions 
under which gold formerly had value have thus been so 
changed as to largely increase its value. If the conditions 
which make a great demand for land in New York City 
should so change as to lessen that demand, the value of 
said land would be diminished. If the conditions under 
which gold is now placed should be so altered as to lessen 
the demand for gold, its value would thereby be dimin- 
ished.* 

* The reader will here please carefully observe the wide distinction 
between things which can readily be increased in amount proportionately 
to an increased use of, and consequent increased demand for them, and 
things surrounded by natural limitations which render it practically im- 
possible for their amount to be augmented nearly simultaneously with an 
augmented demand for them. 

For example, if the use of bricks throughout the nation should steadily 
increase so that five years hence the demand for bricks were twice as 
great as at present, the price of bricks would not materially rise. This 
would be so, because the materials from which they are made are practi- 
cally unlimited, and by the application of capital and labor the supply of 
bricks could and would be so increased that their value would not mate- 
rially change. 

But an increased demand for a thing which, like gold, cannot be read- 
ily augmented in amount by an increased application of labor to its pro- 
duction, must result in an enhanced value of that thing. 



164 SOCIAL STRUGGLES. 

WHAT GIVES STABILITY TO VALUES. 

Another matter of vast practical importance also follows 
as an inevitable deduction from the aforesaid principles, 
viz.: Stability of the value of money and of all other things 
is depe?ident on the stability of the conditions zvhich create 
their value. The majority of persons imagine there is some- 
thing supernatural in the changes which occur in the value 
of money. But in fact there is no mystery about it, — it is 
dependent on altered conditions which produce altered 
judgments and opinions, and these changes of condition 
arise in the same way, and from the same causes, which 
change the conditions of other things; that is, the princi- 
ples, the laws which create those changes, are identical. 

A merchant who wishes to estimate the value of a thing 
at a future specified time will arrive at correct results, just 
in proportion to the accuracy with which he foresees the 
circumstances under which that thing will then be placed. 
The failure of many merchants is due to their want of vigi- 
lance in studying the effect of various industrial and politi- 
cal movements, and consequently not adapting their pur- 
chases and sales to the probable conditions of the future. 
Unlooked for events often occur, and change conditions so 
suddenly as to set at naught the most careful estimates of 
the future value of certain goods. The man whose goods 
such events increase in value is then said to be " in luck." 
But, on the average, " luck " falls to the man who conducts 
his business with the most intelligence, and most carefully 
studies and forecasts the probable conditions which will en- 
viron the goods he deals in. 

COMMON IDEA OF THE CAUSE OF VALUE. 

A few years ago, the Secretary of the United States 
Treasury caused the following statement to be printed : 

" The value of the precious metals depends, as in the case of all other 
commodities, on certain inherent qualities and the cost of production." 

This statement was doubtless the result of consulting the 



COST AND VALUE NOT ALWA YS ALIKE. 165 

works of the most " learned economists," and was pub- 
lished for the instruction of the public. The reader will 
observe one idea in this statement, viz., that value is always 
the product of two facts. First, the inherent qualities of 
the thing itself; — that is, its intrinsic qualities. Second, 
the cost of producing the valued thing. As this is the gen- 
erally accepted belief in regard to the causes which give 
value to everything, let us see if it be true. 

WHY LAND HAS RISEN IN VALUE. 

We will first apply this idea of "value" to that which 
forms a large portion of the assessed valuation of every 
portion of our country; viz., real estate. This valuable 
thing has changed enormously in value during the past 
century, as every intelligent person knows. What has 
caused these great changes in the value of real estate? It 
is not due to the cost of its production, because it was cre- 
ated without human agency. Neither can it be due to its 
inherent, intrinsic qualities, because those are the same now 
that they were when the land where New York City stands 
was not worth a thousand dollars. Thus we see that said 
statement utterly fails to explain the changes which take 
place in the value, of real estate. 

WHY PERSONAL PROPERTY CHANGES IN VALUE. 

Let us next apply it to personal property. If the value 
of wheat depended on its inherent qualities it would 
always have the same value, because its inherent qualities 
are always essentially the same. We see, then, that the 
great changes which occur in the value of wheat happen 
without any change in the wheat itself. But does the dif- 
ference in the cost of producing wheat account for the 
changes in its value ? When we examine this question, we 
find that wheat is sometimes worth 25, 50, or even 100 per 
cent, more than it is at other times, zvJien the cost of its pro- 
ductiojt is substantially unchanged. What is true of wheat is 
true of all other farm products. Hops, for example, have 
always the same intrinsic qualities, and the cost of their 



1 66 SOCIAL STRUGGLES. 

production varies but little. But hops are sometimes worth 
ten times as much as at other times. 

Let us next turn to manufactured goods. When their 
quality is the same, does the value of such goods depend on 
the cost of producing them? If it did, then the value of 
manufactured goods would simply be a reflection of the 
cost of making them. But that this is not so is proved by 
the fact that manufacturers sometimes get far more than 
the cost of manufacture, and make large fortunes as the re- 
sult. At other times, goods are sold for less than the cost 
of making them, and ruin comes to the manufacturer. 

The value which a man gets in payment for his labor 
does not depend solely on the essential qualities of that 
labor. If it did, the value of a workman's services would 
change but little. That is but one of several conditions 
which determine his wages. Neither does the price of a 
man's labor depend on the cost of his living, as it may be 
much more, or much less. 

The value of all things depends considerably on law and 
fashion. I have known good unused carriage bodies which 
cost $75 a piece to manufacture, and the shape of which had 
become unfashionable, sold for half a dollar a piece. Every 
one can recall similar cases wherein great fluctuations in 
value were due solely to changes in public opinion as to 
what was good taste. 

EFFECT OF LAW ON THE VALUE OF GOLD AND SILVER. 

It is a common belief that law has no influence on the 
value of gold and silver. But in- reality nothing owes its 
value more to law than those metals. The recent apparent 
fall in the value of silver is not due to any change in its 
inherent qualities, nor to any alteration in the cost of pro- 
ducing it. The demand for it has been lessened by its 
demonetization in several countries. At the same time 
the demand for gold has been proportionately increased, 
and its value correspondingly enhanced. Suppose the 
demonetization of silver were carried still further by other 
nations discarding it and using gold in place. The inevi- 



VALUE 'IS THE RESULT OF ALL CONDITIONS. 



167 



table result would be a still greater demand for gold, and 
a less demand for silver. The value of gold would then 
rise still higher. 

On the other hand, suppose gold should be generally- 
demonetized and no longer be employed for any purpose 
but use in the arts. The result would be a diminished de- 
mand for gold,— it would no longer be, as now, the royal 
metal, and its relative place in commerce would be different 
from what it is at present. Its inherent properties would 
be unchanged ; the cost of its production would not be 
altered, but its value would be greatly diminished. It would 
be placed under different circumstances ; under conditions 
which would lessen its relative importance. 

Further examples and illustrations of the fact that the 
aforesaid statement of the Secretary of the Treasury is 
misleading will readily occur to whoever will scrutinize it 
properly. The plain facts in regard to the value of a thing 
are, that its inherent qualities and the cost of its produc- 
tion have more or less influence in determining it. But 
the peculiar qualities of a thing, and the cost of making 
another thing like it, are only two facts, in the midst of a 
multitude of other facts, conditions and circumstances, 
which also affect its value. These two facts aforesaid may 
therefore be, and usually are, the dominant conditions, or 
they may have little or no influence on the value of a thing 
at a given time and place. 

THINGS DO NOT POSSESS TWO VALUES. 

Many persons suppose that things possess two values : 
an intrinsic value and an exchangeable value. Much paper 
has been spoiled in attempting to show that two kinds of 
value exist. These writers call the utility of a thing its 
intrinsic, inherent value. 

If a given thing possess intrinsic, inherent value, it nec- 
essarily follows that the amount of intrinsic value in pos- 
session of a man will be multiplied by the number of those 
things which he owns. But this is not the fact. A thing 
possesses utility to a man to the extent that it supplies his 



1 68 SOCIAL STRUGGLES. 

wants, and no farther. Suppose a person needing a pecul- 
iar kind of shoes should order a pair, and by some mistake 
a thousand pairs were made. The first pair would be the 
most valuable ; the second pair less valuable, because their 
value would depend on the contingency of their owner 
living long enough to want them. The third pair would 
be still less valuable, and this diminution of value would 
continue until a point was reached where the shoes be- 
came worthless. 

A team of two horses is valuable to a man who has; 
use for them. But it does not therefore follow that four 
horses would have double the value of one pair. On 
the contrary, part of them might be a useless burden and 
expense. 

Suppose a farmer needing a thousand gallons of water 
daily for the use of his family and live stock should dig in 
his hillside for a spring. After excavating for some dis- 
tance, suppose a spring was found which poured over a hun- 
dred thousand gallons daily. The water which the farmer 
needed would be of utility to him, but the excess would be 
of no value and might be an injury to his farm. If the cir- 
cumstances and surroundings of the farmer were such that 
he could sell, or in some way use all of the water, the 
whole of it would be valuable ; but this would simply be 
confirmatory evidence that all values are created by con- 
ditions. 

The principle which renders an addition to the amount 
or numbers of a certain thing, beyond what is needed, by a 
person at a given time and place, of less and less utility ap- 
plies to all things under all circumstances. This could not 
be so if utility and value were intrinsic qualities. 

EXCHANGEABLE VALUE. 

Let us now see if there be really any such thing as " ex- 
changeable value " attached to any substance whatever. 
If there be, it follows that the thing which actually pos- 
sesses exchangeable value can always be exchanged for 
another valuable thing. But this is not the fact. A thing 



WHAT MAKES A THING EXCHANGEABLE. 



169 



may be exchangeable at one time and place for a great va- 
riety of other valuable things ; but under different circum- 
stances the owner of this same thing may not be able to 
exchange it for a small portion of food, drink, or any other 
object of desire. Thus we see that exchangeable value is 
not an inherent quality of a thing. Whether a given thing 
can be exchanged, at a given time and place, for one or 
more valuable things, depends entirely on the circumstances 
and attendant facts. 

The inherent qualities of a thing do not necessarily de- 
termine whether it can be exchanged or not ; they simply 
are one out of a great number of other facts and circum- 
stances which decide that question. A combination of 
certain facts must exist in order to enable a man to ex- 
change one thing for another, no matter how desirable the 
ownership of that thing is usually considered. Life-pre- 
servers can ordinarily be bought with a little money ; but 
on a sinking ship it would be impossible to buy one with 
any amount of money. 

That a given thing is often worth more to one man than 
to another is a fact of daily observation. This is so be- 
cause the value of a thing to a man depends on the use he 
can make of it, and this depends on his abilities and cir- 
cumstances. Value varies greatly in amount ; but its 
changes in amount do not change its character and essen- 
tial qualities. There is no more propriety in saying that 
two kinds of value exist than there would be in saying 
there were ten kinds of value. 

Dividing value into two kinds is as absurd as it would be 
to say: " There are two kinds of weight : one is the weight 
that a man can lift and walk off with, the other is a 
weight that he cannot lift." The above and kindred errors 
have arisen from setting out to discuss value without exam- 
ining the fundamental facts and principles which underlie 
the subject. 

The considerations heretofore stated show us that the 
importance of a certain thing, at a given time and place, 
depends entirely on its having such a relation to other 



170 SOCIAL STRUGGLES. 

things and facts that it supplies an actual or fancied human 
necessity or desire. Furthermore, it appears that the word 
''value" is simply an abbreviated form of stating the re- 
sult of an exercise of human judgment as to the extent to 
which a necessity or desire can be supplied by a certain 
thing, at a given time and place, and the relative importance 
of such a supply in comparison with other things. Value is 
therefore a human opinion as to the relative worth of a 
thing, and what this opinion shall be depends entirely on 
the circumstances and conditions under which that opinion 
is formed. 

Human judgment is liable to error, and it frequently 
fails to accurately compare the worth of one thing with 
that of another. Mankind often attach an undue value to 
some things and at the same time prize other things less 
highly than they should. At least, so it appears when cent- 
uries of history record their verdict. But however much 
we may regret that it is often a serious problem to know 
what constitutes TRUTH, and therefore dif^cult to under- 
stand the TRUE value of a thing, we have no other means 
of determining it, — no other standard of value, except 
human judgment of the relative benefit, desirability and 
importance of possessing one thing, under the existing cir- 
cumstances, compared with some other thing or things, at 
the same time and place. As the human mind is a 
complex instrument, affected by a multitude of influences, 
it necessarily follows that its conclusions on the value of a 
thing depend on the circumstances under which such 
judgment is rendered. 

FINAL ANALYSIS OF THE NATURE OF VALUE. 

Thus, in the last possible analysis of value, we find it a 
thought, a judgment, a perception of the relation of things 
to one another and to mankind. Value, therefore, is imma- 
terial, like all other thoughts and judgments. We can give 
it a symbolic representation, but the thing itself is as in- 
tangible as beauty. No one will deny the existence of such 
a thing as beauty, but no one ever saw it. This is so be- 



THE CREATION OF VALUE. 



171 



cause beauty is a thought, — it is a mental perception of 
color and proportion ; we can make its symbols, but the 
thing itself cannot be made, because it is not material. If 
beauty and value were material things we could make them 
out of some substance, and then say : This is beauty and tJiis 
is value. As the facts are, the farthest we can go is to say : 
This is beautiful and this is valuable, — that is, these are our 
ideas of the qualities which representations of beauty and 
value should possess, and how they should appear. 

DIFFERENT AMOUNTS OF VALUE CREATED BY THE SAME 
AMOUNT OF LABOR. 

Having found that value is purely a creation of circum- 
stances and conditions, let us now consider some prac- 
tical applications of the foregoing principles. The ma- 
jority of persons imagine that value is the creation of labor, 
and that labor always creates value. 

The fact is that value is always created by labor, but 
labor does not always create value. A small amount of 
labor sometimes creates a large amount of value. The fort- 
unate borer for an oil-well may create more value by one 
week's labor than ten men would ordinarily create in a life- 
time of toil. 

On the other hand, a large amount of labor may, and 
often does, produce but little value, or it may be expended 
without creating a particle of value. Furthermore, not 
only may labor fail to create any value but it may actually 
destroy value which has been previously created. 

When labor changes circumstances, facts and conditions 
so that a want and supply are made to fit each other just 
as one blade fits another and forms a pair of scissors, value 
is created. But the amount of labor expended in bringing 
about this condition and the amount of value thereby 
created vary enormously ; thus showing that the value 
created is not solely dependent on the labor expended. 

Suppose A and B should each buy an acre of land, of 
equal fertility, and set to work to convert their respective 
lands into gardens. In doing so each man performs an 



1/2 



SOCIAL STRUGGLES. 



equal amount of labor, but the product of A'sland is treble > 
the value of that of B. This arises from the fact that A • 
knows under what conditions different plants thrive best. 
He knows how to prepare the soil, when to plant, and the 
different kinds of manure and cultivation required by differ- 
ent vegetables. In short, he understands how to apply his 
labor so as to place each plant under the most favorable 
conditions for growth. But B works without full informa- 
tion of the needs of his plants. Consequently, B, with 
the same amount of exertion, fails to create the conditions 
that A did, and a smaller amount of value therefore re- 
sults from his toil. 

When wheat is taken to a market open to the competi- 
tion of the owners of wheat throughout the world, its value 
is the same, whether raised by hand labor on a naturally 
poor soil, or raised by machinery on a fertile soil with little 
labor. A similar fact is true of the value of all other things. 
If a miner dig ten thousand dollars' worth of gold in a 
day, that gold brings the same price per ounce as the gold 
does for which another miner spent a month in digging an 
ounce. Buyers of goods pay for results : they pay for the 
creation of facts and conditions without estimating the 
amount of labor which was expended in order to produce 
those results. The price of one thing is not affected by 
the fact that it may have cost either more or less labor to 
produce it than was expended in producing a precisely 
similar thing. 

Thus we see that labor is necessary to create value, and 
that therefore, if all other things were equal, the amount of 
labor required to create a thing would be a correct index 
of its value. 

WHY LABOR DOES NOT ALWAYS CREATE WEALTH. 

But Other things are seldom equal, and therefore there is 
a law which determines the arnoimt of value which shall be 
created by a given amount of labor. The real force which 
evokes value where it did not exist, and which increases the 
value of things already created, is a suitable change in the 



WHAT CREATES VALUE. 



173 



relation of facts and things to mankind. If labor produce 
this suitable change, labor creates value. But if labor be 
•not directed with sufificient intelligence, if the desired re- 
sult does not flow from it, the labor is wasted. It is the 
proper conditions zvJiich create value : labor is merely an in- 
strument which, when rightly managed, forms circumstances 
and facts under the influence of which value is created or 
enhanced. 

More or less labor is always required either to create a 
valuable thing or to enhance the value of something already 
created. But the amount of value resulting from a given 
amount of labor depends on the circumstances under which 
it is performed, and the intelligence with which it is guided. 

To a very large extent, the foregoing simple fact is not 
recognized. All over the world an enormous amount of 
labor is constantly being performed which creates no value 
whatever, simply because it is unskillfully performed or un- 
wisely directed. It frequently happens that a large amount 
of labor is expended on some enterprise without reference 
to the conditions which the completion of that enterprise 
will produce. A common example of this is the construc- 
tion of useless canals, railroads, streets and buildings. 
These and other ill-judged schemes are continually started 
and carried on by States, cities, companies and individuals. 
A considerable number of these ruinous works are under- 
taken solely because other works of the same kind, but per- 
formed under different conditions, are successful. 

Comparatively recently, a large number of the people of 
Connecticut spent a considerable amount of money under 
the delusion that value could be created by building a little 
canal from New Haven, northerly to the Berkshire Moun- 
tains ! A large amount of value was created by the Erie 
Canal, but it was not produced simply by the expenditure 
of a certain amount of labor, nor merely by making a canal. 
Value was produced by creating a new condition ; viz., the 
union of the Hudson River with the chain of great Western 
lakes, thereby establishing a cheap mode of changing the 
condition of goods by carrying them from places where 



174 



SOCIAL STRUGGLES. 



they had one value to places where they had another and 
a greater value. 

Many persons suppose because one work, — called a canal, 
or railroad, a mine, or a factory, — creates value, that there- 
fore any other enterprise of the same name and kind will 
prove remunerative. Absurd as this mistake may seem, it 
is frequently made, and vast amounts of labor are annually 
squandered in consequence. A multitude of these unfortu- 
nate schemes would never get beyond the budding stage if 
their originators would calmly sit down and inquire : " After 
this work is performed, will the same facts and conditions 
which environ similar works in successful operation sur- 
round this enterprise ? " 

The practical lesson from the foregoing is, that value, 
and therefore wealth, is most rapidly created, legitimately, 
by the persons who best know Jioiu to create conditions which 
will supply the various wants and desires of mankind. 

HOW WE STATE VALUE. 

Having considered the essential nature of value, let us 
next see how we define our ideas of its varying amounts, 

how we state the different degrees in which value may be 

attached to a thing. 

The majority imagine that values are measured by money 
and that therefore money must have intrinsic value, just as 
a peck measure must have a certain bulk in order to meas- 
ure bulk. A little consideration will show that we do not 
measure values with money, in the sense that we measure 
distance with a yard-stick or tape-line. Values are meas- 
ured by the judgment. We can give a child a quart measure 
and send him out to buy a quart of milk, because the meas- 
ure determines the amount of a given article ; but no one 
would think of trusting a child to "measure" value ^\t\^ 
money. If money measured value, we could give a child a 
handful of gold coins and entrust him to buy a horse. If 
gold coins measured value accurately, as we are told they 
do, then possession of these coins would enable one man to 
estimate values as wisely as another, just as one man can 



HOW VALUE IS ESTIMATED. 



175 



take a ten-foot pole and measure a hundred feet almost as 
well as another. 

V and W each have ten gold eagles and go out shopping. 
They visit a number of different stores and each one ex- 
pends her money for a variety of articles of wearing ap- 
parel. After returning home, the goods purchased are 
compared with each other and it is found that V has ob- 
tained a better quality of goods, has received far more 
value for her money, than W. When they started out shop- 
ping, the things commonly called the "measure of value " 
which each one took along with her, were alike. But one 
woman carried along with her more judgment and intelli- 
gence in regard to what she proposed to buy than the other. 

Values are our judgments of the relative worth to us, 
under our circumstances, of one thing as compared with an- 
other. There is no other way of stating our ideas of the 
value of a certain thing, at a given time and place, except 
by comparing it with some other thing. There are gener- 
ally one or more things which circumstances make us want 
more than we do other things. Therefore we state value 
by saying how much of this we will give for so much of 
that. Our conduct is essentially the same, whether we are 
giving our views of value by comparing one commodity 
with another commodity, or whether we are comparing 
money with a commodity. 

A man's idea of the value of a certain thine; to himself 
does not depend simply upon his actual circumstances. 
His judgment and opinion of his needs determine the 
amount of value which he will put upon a certain thing. 
Furthermore, a man's idea of the value of one thing always 
depends on the way in which he compares it with another 
thing. Or in other words, a man's idea of the value of one 
thing depends on his ideas of the value of the thing with 
which he compares it. Consequently a correct judgment in 
regard to values is only possible to those who have intelli- 
gence concerning the thing to be appraised. Hence, as a 
matter of daily occurrence, when we wish to " measure " the 
value of a particular thing we do not approach or test it 



1^6 SOCIAL STRUGGLES. 

with money. If we are not intelligent in regard to it our- 
selves, we employ some one who has that special knowledge 
to aid us. We employ a jeweler to tell how much a pre- 
cious stone is worth. We get a man who knows the good 
points of a horse to select or appraise a horse. We employ 
a man familiar with real estate and buildings to tell us the 
value of a house, and we consult one skilled in knowledge 
of ships if we wish a vessel appraised. In short, when we' 
wish to " measure " the value of a thing, we employ in- 
telligence and judgment in regard to that thing. Wq co;n- 
pare it with other things and we use money and money- 
terms to facilitate a statement of this comparison. 

Purchases and sales are made after consideration ; the 
price depends upon the intelligence, judgment, and necessi- 
ties of the buyer and seller — it is not "measured" by the 
money used in the transaction. We express ourselves in 
terms of money merely as a convenient mode of stating our 
ideas and judgment of the value of a given thing, so that 
others can understand us. The unit of value, the dollar, 
for instance, is used to compare the value of one thing with 
another. The whole community speak of things as being- 
worth so many dollars, and thus they arrive at a common 
understanding of value by using a common means of com- 
parison. If one man said a thing were worth so many bush- 
els of wheat, another man said it were worth so many days' 
labor, and another man said it were worth so many pounds 
of cheese, etc., etc., great difficulty of making exchanges 
would exist. But, by all parties using the same comparison, 
exchanges are facilitated and our judgments of values are 
steadied. 

Suppose two farmers wish to trade stock. Both have in 
mind, consciously or unconsciously, an idea of the value at- 
tached to the unit of value, the dollar. One says : " Those 
pigs of mine are worth about five dollars apiece ; that heifer 
of yours is worth about four times as much as one of my 
pigs. I will give you my three pigs and five dollars for your 
heifer." Money is thus used, not to measure value, but as a 
help to compare, couwt and state values. We " measure " 



NO SUCH A THING AS INTRINSIC VALUE. 



177 



value with our brains ; we record mid state value by using 
the names of units of money. 

W. M. Evarts, our former Secretary of" State, has made 
an elaborate argument intended to show that values are meas- 
ured by money just as we measure distance with a rod, or 
weight with pound weights ; and that therefore money must 
have " intrinsic " value in order to measure value. The 
learned gentleman did not tell us how the value of money 
was determined in order to obtain a " measure " to start 
with. An inquiry of this kind would have led him to the 
conclusion that the value of money is determined by the 
judgment, and that the value of all things computed in 
money must therefore rest on the same foundation as the 
value of money itself. 

When a farmer takes a hundred bushels of wheat to mar- 
ket and exchanges it for money, a double comparison takes 
place. The wheat is com.pared with money, and the money 
is compared with wheat. The dealer in grain buys the 
wheat and the farmer buys the money. The wheat " meas- 
ures " the value of the money just as truly as the money 
*' measures " the value of the wheat. 

DISTINCTION BETWEEN VALUE AND INHERENT QUALITIES. 

A considerable portion of the financial legislation of this 
country, for the past fifteen years, has been enacted on the 
theory that gold and silver possess " intrinsic value," and 
that such value is necessary to " measure " other values 
with. 

A man was arrested for beating his wife. Defense was : 
"■ I treat women with the utmost kindness. I have no 
wife." 

In fact, there is no such thing as intrinsic value. We do 
not " measure " value with money in the sense that we 
could if such a thing as intrinsic value actually existed. 
When silver coins first took the place of fractional paper 
money, many persons were surprised to find that their pur- 
chases and sales went on as before the circulation of an 
alleged " measure of value." 
12 



178 



SOCIAL STRUGGLES. 



The idea that gold, silver, copper and other things pos- 
sess "intrinsic value' has arisen from not recognizing the 
distinction between the intrinsic, inherent, physical qual- 
ities of a thing and the value of that thing. Thus, anthra- 
cite coal has certain intrinsic qualities. It is black, com- 
posed chiefly of carbon, is combustible, and has certain 
other intrinsic, physical qualities. Neither time, location, 
nor any other circumstance, has any effect on these intrin- 
sic qualities. If every nation in the world should enact 
that anthracite coal should thereafter be white, it would 
not have the slightest effect on its color. The inher- 
ent, intrinsic qualities of coal are precisely the same at the 
mines as when carried to the market where it has the great- 
est value. 

VALUE NOT AN INTRINSIC QUALITY. 

The mistake lies in assuming that value is an '* intrinsic " 
quality. If its value were an inherent quality, coal would 
have the same value under all circumstances ; just as its 
color and other intrinsic qualities are invariable. But we all 
know that the value of coal depends on the conditions un- 
der which it is placed. Legislation could not, in the slight- 
est degree, affect a single one of the intrinsic qualities of 
anthracite coal. But legislation could be enacted which 
would materially affect its value. For instance, if a heavy 
tax were laid on all the bituminous coal mines, and rigidly 
collected, it would increase the cost of bituminous coal and 
thus indirectly raise the value of anthracite coal. Legisla- 
tion might be enacted which would practically rob the 
owners of bituminous coal mines of a considerable portion 
of their value and transfer this value, thus wrongfully taken, 
to the owners of anthracite mines. Such a measure would 
be facilitated by the fact that anthracite coal deposits are 
limited to a comparatively small area. 

Gold has certain inherent, physical qualities which can- 
not be altered except by destruction of that metal. It has 
a beautiful orange color, is very malleable, has a high spe- 
cific gravity, and does not rust. These are the intrinsic 



DISTINCTION BETWEEN VALUE AND QUALITIES. jjg 

qualities of gold, and they are fixed and invariable under 
all conditions and circumstances. If the stock of gold in 
human possession were reduced to one hundredth part of 
the present stock, each ounce of that gold would have pre- 
cisely the same intrinsic qualities which are now possessed 
by each ounce of gold. On the other hand, if a mountain 
of pure gold were discovered, so easy of access that it could 
be mined as cheaply as coal now is, that fact would not 
affect the intrinsic qualities of gold in the slightest degree. 
Each ounce of the gold taken from such a mine would have 
the identical, intrinsic qualities which are now possessed by 
gold. 

If all the nations of the world were to enact that gold 
should hereafter be the sole legal tender ; and also prohibit 
the use of paper money entirely, in every form whatsoever^ 
the intrinsic qualities of gold would remain unchanged. It 
would still be a bright yellow color, be malleable, very 
heavy, and unaffected by exposure to the air. 

LEGISLATION HAS NO EFFECT ON INTRINSIC QUALITIES. 

Legislation which might decrease the demand for gold 
would have no effect on its intrinsic qualities. The univer- 
sal demonetization of gold would not affect its weight, its 
color, nor any other one of its intrinsic qualities in the 
least. 

The aforesaid facts in regard to gold are equally true in 
regard to silver, copper, tin and all other metals. Each 
metal possesses intrinsic qualities peculiar to itself which 
cannot in the least be affected by legislation, scarcity, 
plenty, time, or any other condition or circumstance what- 
soever. A multitude of persons suppose the "intrinsic" 
qualities of silver have changed since 1872. But, in fact, 
we have no evidence that any change in the intrinsic quali- 
ties of silver has occurred since the creation of the world. 
Its intrinsic qualities are invariable, and therefore unchange- 
able by legislation. 



j8o social struggles. 



A PROLIFIC ERROR. 



The parent of an enormous amount of unwise legislation 
is the fundamental error of assuming that value is an 
" intrinsic quality " of gold and silver. Persons talk about 
silver having " lost a portion of its intrinsic value." The 
plain fact is that silver never had any intrinsic value. It 
always possessed certain intrinsic physical characteristics 
and qualities, but xisvahie has always depended on precisely 
the same circumstances and conditions which have given 
value to gold, iron, lead, copper, and all other metals and 
things ; viz., its supply relative to the demand for it ; its 
relative importance compared with other things. When 
people say, "Legislation has no effect on value," they have 
always previously assumed that value was an intrinsic qual- 
ity. They confound 2. pJiysical quality with a result. 

WHAT IS NECESSARY TO THE EXISTENCE OF VALUE. . 

Nothing is "valuable" unless three facts unite. First. 
A thing must possess certain intrinsic, physical qualities 
which adapt it to supplying a human want. Second. A 
person must have a want which the intrinsic, inherent quali- 
ties of a certain thing would supply. Third. The person 
having the want must be supplied with the thing whose 
intrinsic qualities satisfy that want. Then the thing pos- 
sessing those qualities has a value. The amount and 
degree of such value depends entirely on the circumstances 
under which the want is supplied ; on the urgency and 
intensity of the want ; on the difificulty of supplying it in 
any other way ; and on the fullness with which the desired 
thing satisfies the need. 

To illustrate how value arises from the union of certain 
conditions, let us suppose a man suffering from cold and in 
want of protection from the air. A woolen blanket pos- 
sesses the intrinsic qualities which would supply this man's 
wants. When the blanket is placed in possession of the 
man, a value is created, — a want has been supplied with a 
substance possessing the requisite intrinsic qualities to sup- 



HOW VALUES ARE CHANGED. ^Zl 

ply that want. The degree of the value of said blanket 
to the shivering man depends on the surrounding circum- 
stances. It might be so that the man would regard 
possession of the blanket as a matter of life or death to 
him ; or, it might be so that his wants could otherwise 
be easily supplied and thus give the blanket the value 
ordinarily possessed by it. 

VALUE IS ALWAYS RELATIVE. 

When a man talks of the " value " of a thing, it is only 
another way of saying : " This thing, to me, under the 
present circumstances, is worth more than that thing, or 
those things." Value is an idea of the relative importance 
to a man, under his existing circumstances, of one thing as 
compared with another thing. Thus a wounded soldier 
lying on the battle field would think a twenty-dollar gold 
coin of much less importance than a drink of water. This 
is simply because the value of the coin is not "intrinsic," 
but the creation of circumstances. Ordinary conditions 
give it its ordinary value. Extraordinary conditions either 
raise or lower its value to an extraordinary degree. Leg- 
islation can affect the value of coins to the extent that it 
can increase or diminish their relative importance as com- 
pared with other things. Whenever the relative importance 
of a thing which possesses intrinsic qualities adapted to the 
supply of human necessities and desires is increased, the 
advantage of owning such a thing and its value are thereby 
increased. Any event which makes it more difficult to ob- 
tain possession of a thing the ownership of which is desira- 
ble, increases what we call the "' value " of that thing. 
The relative importance, and consequently the value, of 
one thing as compared with all other things maybe changed 
by various events. 

First. It may become smaller in actual amount, scarcer, 
and more difficult to obtain in consequence. Thus a 
short crop of wheat throughout the world makes that grain 
more valuable. Its importance in comparison with other 
things is increased. 



1 82 SOCIAL STRUGGLES. 

Second. It may become larger in actual amount, 
plentier, and more easily obtained. An unusually large crop 
of wheat throughout the world diminishes the relative im- 
portance of a bushel of wheat, as compared with the im- 
portance of other things, and thus diminishes its value. 

Third. The amount, the supply of a certain thing may 
be unchanged, and, at the same time, its relative impor- 
tance and consequently its value may be either increased 
or diminished by other events which either increase or 
diminish the demand for such a thing. This fact was 
noted by Adam Smith, and has ever since been recognized 
by every respectable writer on political economy. When- 
ever two things are used for the same purpose and one of 
those things becomes plentier, or less difficult to obtain, the 
value of the other thing is thereby diminished. And, on 
the other hand, whenever one of those things becomes 
scarcer, or, for any reason, more difficult to obtain, the 
value of the other thing is increased. 

Beef and mutton are used for a similar purpose. When 
beeves are very plenty and cheap, the tendency is for people 
to buy beef instead of mutton. This reduces the price of 
mutton. When beef is very scarce and dear, mutton is in 
greater demand and consequently more valuable. An in- 
crease or a diminution in the supply of mutton has a sim- 
ilar effect on the demand for beef. 

When mules and oxen are plenty and cheap, there is 
less demand for draught-horses. The importance of a 
draught-horse is thus relatively diminished and his value 
lessened. When mules and oxen are scarce and high, 
the relative importance of a draught-horse is thereby 
increased and his value consequently raised. 

When bituminous coal is made plentier and cheaper the 
inevitable effect is to lessen the use and demand for anthra- 
cite coal. If bituminous coal should become scarcer, or, for 
any reason, less desirable or more difficult to obtain, the value 
of anthracite coal would be enhanced. 

Hundreds of illustrations similar to the foregoing could 
be cited if necessary. The curious thing is that the appli- 



EACH MAN SHOULD THINK FOR HIMSELF. 



183 



cation of the aforesaid established and famiHar principle 
has been so largely overlooked in regard to the relative 
value of gold and silver. Prior to the demonetization of sil- 
ver, gold and silver were both legal tenders, and used for the 
same purpose. The disuse of silver as a legal tender imme- 
diately increased the relative importance of gold ; it became 
relatively scarcer and more difificult to obtain, and its value 
was therefore inevitably increased. Many persons have 
supposed the gold dollar unchanged in value because its 
weight is unchanged, and because the number of gold 
dollars has not been materially diminished. Such persons 
forget that all things are relative, and that the number of 
gold dollars, relative to the demand for them, has been 
largely diminished. 

ONLY ONE WAY TO LEARN THE NATURE OF VALUE, 

Very little substantial progress can be made toward un- 
derstanding finance and kindred topics without first clearly 
learning the essential nature of value. There is only one 
way to acquire this indispensable knowledge. The student 
must carefully think the subject over for himself from 
beginning to end. If he be too lazy to do this, he will 
never comprehend what value is, and, necessarily, will never 
have a correct idea about either it or any related subject. 

This consideration of value can and should be made by 
using the simplest and most familiar things as objects of 
study. Thus a person who lives near a brick-yard can find 
therein a practical illustration of every fact and principle 
heretofore discussed, concerning value. He will first ob- 
serve a bank of undug clay. This he will notice has certain 
intrinsic qualities which make it suitable material for mak- 
ing bricks. He will next find that the value of clay in the 
bank is very small. That even this small amount of value 
is not "intrinsic " can readily be seen by asking: Are there 
not many locations wherein such a clay bank would have 
no appreciable value whatsoever? 

The observer will next note that four thousand pounds of 
unworked clay are worth only a few cents, and four thou- 



184 SOCIAL STRUGGLES. 

sand pounds of good bricks are worth ten dollars. This 
change of value, he will find, has arisen because alterations 
have been made in the clay by making it into things which 
will supply a human want. 

He may next see two piles of brick, upon each of which 
the same amount of labor has been expended. One pile is 
worth ten dollars, while the other is worth only five dollars 
per thousand. Upon inquiry, he will find this is so because 
one kiln was spoiled by unskillful burning ; the necessary 
amount of labor was used but it did not produce the re- 
quired conditions. 

If told that the best bricks have an intrinsic value 
of ten dollars per thousand, the student can test the accu- 
racy of that statement by asking : Could these bricks be 
taken to a place where they would have no appreciable 
value? Their size, shape, weight and other intrinsic quali- 
ties would not be altered by such, a removal, but their value 
could be destroyed by an unfavorable change of the con- 
ditions surrounding them. 

In the foregoing simple manner, the fact that value is ex- 
trinsic and not intrinsic can be demonstrated by study- 
ing the facts relative to any familiar object to which the 
idea of value is ordinarily attached.* 

* FALSE THEORIES IN REGARD TO LAND. 

* Plausible schemes have been advanced, based on the assumption that 
land values were created by the Deity, are not the result of human exer- 
tion, and, consequently, a man has no more right to exclusive owner- 
ship of land than to ownership of sunshine. It is imagined that land is 
so different from all other things that its value is governed by a special 
natural law whose operation differs entirely from the force which creates, 
increases and diminishes other values. These theories rest on the idea 
that value is an intrinsic quality of land. They ignore the fact that 
the value of land, like that of all other things, is simply a result of condi- 
tions, and that the law governing value applies impartially, and ordains 
that value shall always be an extrinsic result, no matter what the thing- 
affected thereby. Otherwise as an iittrinsic attribute is inseparable 
from its possessor (in integrity), a given piece of land, under all circum- 
stances, would always have the same value. See Chapter XX. 184 



RELATIVE VALUE OF GOLD AND SILVER. 



185 



The effect of legislative change in the circumstances under which a 
thing is placed upon the value of such thing has been recently exempli- 
fied by a gigantic experiment. The Director of the United States Mint 
has compiled the following table, showing the value of one ounce of gold 
relative to one ounce of silver from the beginning of this century to the 
time when legislation increased the demand for gold. 

RELATIVE VALUE OF GOLD AND SILVER FROM 180O TO 1872. 



Year. 



800 
801 
802 
803 
804 
805 
806 
807 
808 
809 

8io 
811 
812 

813 
814 
815 
816 
817 
818 
819 
820 

821 

822 
823 
824 



Ratio. 



15.68 
15.46 

1 5 . 26 
15.41 
15.41 

15-79 
15.52 

15-43 
16.08 
15.96 
15-77 
15-53 

16. II 
16.25 
15.04 
15.26 
15.28 
15. II 
15-35 
15-33 
15.62 

15-95 
15.80 

15-84 
15.82 



Year. 



825 
826 
827 
828 
829 
830 

831 
832 

833 
834 
835 
836 

837 
838 

839 
840 
841 
842 

843 
844 

845. 
846, 

847. 



Ratio. 





.70 






.76 






• 74 






78 






78 






82 






72 






73 






93 






73 






80 






72 






83 






85 






62 






62 






70 






87 






93 






85 






92 






90 






80 






85 





Year. 



[849 
[850 
[851 
[852 

'853 
[854 
[855 
[856 

1857 
[858 
.859 
[860 
)i 

)2 
[863 
[864 

35 

[866 
[867 
[868 
[869 
[870 
[871 



Ratio. 



78 
70 
46 

59 
33 
33 
38 
38 
27 
38 

19 
29 

50 
35 
37 
37 
44 
43 
57 
59 
60 

57 
57 
6-. 



During the period embraced by the above table great fluctuations oc- 
curred in the relative productiveness of gold and silver mines. From 1848 
to 1868 the estimated world's production of gold exceeded that of silver 
by an aggregate of 1944 millions of dollars' worth. But, as shown by the 
foregoing table, this enormous excess in production of gold over silver 
had but little effect on their relative value. This was because the chief 
source of the value of both those metals was a condition under which 
both were placed, viz. : unlimited coinage into legal-tender money. Dur- 
ing that time so much demand constantly existed for legal tender that 
the fact of bullion, of either gold or silver, being readily convertible into 
such tender, dominated all other conditions and prevented any material 
change in their relative value as a result of changes in production. 



1-86 



SOCIAL STRUGGLES. 



This illustrated the universal law that the value of a thing is always 
chiefly detertnined by the do/ninant circumstances surrounding it, no 
matter what those circumstances may be. 

In 1872 and 1873, as will appear in the next chapter, several nations 
placed silver under legal disabilities not existing before. The altered 
conditions thereafter occupied by silver and gold at once produced 
changes in the relative value of those metals, as appears by the following 
table : 

RELATIVE VALUE OF GOLD AND SILVER FROM 1872 TO 1885. 



Year. 



1873 
1874 
1875 
1876 

1877 
1878 

1879 



Rat 


io. 


1 5 •92 


16 


17 


16 


S9 


17 


88 


17 


22 


17 


94 


18 


40 



Year. 



I880 
1881 
1882 
1883 
1884 
1885 



Ratio. 



18. 05 

18 ' 

18 

18 

18 

19 



16 

19 

64 

57 
41 



The following table shows the value of 41 2\ grs. of standard silver, be- 
fore coinage into a silver dollar, relative to the value of 25^ grs. stand- 
ard gold after coinage into a dollar, for twelve years before and twelve 
years after 1873. 



Year. 



1862 
1863 
1864 
1865 
1866 
1867 



Cents. 
104. 16 
104.06 
104.06 
103.52 
103.63 
102.67 



Year. 



I«68 
1869 
1870 
1 871 
1872 
1873 



Cents. 
102. 57 
102.47 
102.67 
102.57 
102.25 
100.46 



RELATIVE VALUE AFTER CESSATION OF COINAGE. 



Year. 



1874 
1875 
1876 
1877 
1878 
1879 



Value. 



.96,4 

.89,4 

•92,9 
.89,1 



Year. 



i««o 

1881 
1882 
1883 
1884 
1885 



Value. 



.85,8 

.86,1 
.82,3 



CHAPTER IX. 

The Silver Question : It Comprehends Many Things. — Historical Sketch 
of the Silver Dollar. — Acts of 1834 and 1837. — Relative Value of 
Silver and Gold Dollars.— Option of Payment by either Gold or 
Silver. — Tendency of Commerce. — Established Right of both Credit- 
ors and Debtors. — Silver Coinage. — Effect of Demonetizing Silver. — 
Contagiousness of Vice. — False Doctrines framed into Law. — Fun- 
damental Facts about Gold and Silver. — Attempt to Demonetize Gold. 
— Present Consumption of Gold in the Arts. — Origin of the War on 
Silver. — An Old Subterfuge. — Effect of Legislation on the Value of a 
Dollar. — Value of all things Dependent on the same Law. — An Ex- 
ample of Legislative Theft. — A Talk with a Clergyman. — One Pur- 
pose under Various Pretenses. — A Doctrine Dangerous to Creditors. 
— Ought the Silver Dollar to be made Heavier ? — Danger of Rob- 
bing Debtors. — Debt not Disreputable. — The True Doctrine. — 
Nothing is more Detestable than Hypocrisy. — The Cry for Honesty. 
— Groundless Charges against Silver. — Why Silver does not Circulate. 
— Superiority of Paper Money. — The Essential Allegation in regard 
to Gold. — Has Gold a Fixed Value ? — The Bullion Report. — Facts 
which Overthrow the Common Theory in Regard to Gold. — Origin 
of a Belief in the Fixed Value of Gold. — By Comparison with Things 
other than Itself, is the only Way in which We can Ascertain and 
State any of the Qualities of any Object or Thing. — All Ideas are 
Relative. — Need of Comparing One Thing with Something besides 
Itself. — Value of Gold should be Tested as all other Things are.— 
Logical Results of Comparing Gold only with Gold. — Result of un- 
limited Coinage of Silver. — Correct Mode of Stating the Value of 
Gold and Silver. — What a Price is. — Money changes in Price like 
other Things. — How to Test the Price of Money. — The Price of Gold. 
— Correct Test of the Rate of Interest. — Public Debts and Taxes. — 
An Example of Benevolence. — The True Explanation. — What has 
changed the Value of Gold. — America bearing down the Prices of 
American Goods. — Effect of Lowering Prices in England. — The 
Delusion that Gold Prices would not Fall. — Effect of Making a 
Metal Legal Tender. — Has Silver Depreciated in Value ? — How to 
Test the Value of Silver. — An Official Table of Relative Prices. — 
Another Comparison of Prices. — Ought an Equality be Maintained 
between the Value of Gold and Silver Dollars ? — Statements of the 

187 



igg SOCIAL STRUGGLES. 

New York Tribune. — Money should maintain a Relative Uniformity 
in Amount. — Stability of Prices is the Practical Result of a Stable 
Currency. — The 125-Cent Dollar. — Labor a Test of Value. — Silver 
has Risen in Value. — Why Silver has not Fallen in Value. — Silver has 
always Fluctuated in Value. — Why England has a Gold Currency. — 
Should We make Times harder in Europe ? — Are Payments in 
Silver Honest ? — Written Contracts more Reliable than Vague Un- 
derstandings. — A Man cannot lose what He never Owned. — Differ- 
ences in Relative Value of Gold and Silver. — A Suggestion for Con- 
sideration.— Result of Entire Demonetization of Silver. — The Idea 
of Coercing England. — Ought Prices to ^e Depressed by Legisla- 
tion 1 — The best kind of Money. — Stable Money best for the Masses. 
—A Stable Currency best for Debtors.— Why different Classes have 
Different Ideas. — A Notorious Fact. 

The present monetary a7id social situation of affairs will not 
lose interest after coming events have replaced it tvith differ- 
ent conditions. As an illustration of the inevitable tendency 
of certain legislation to produce certain results, it will have a 
permanent historical value for guidance in the formation of 
public policy tJirougJiout all future time. 

We have now studied elementary principles far enough 
to begin a consideration of the silver question. 

A large number of persons have learned that a silver dol- 
lar is heavier than a gold dollar, and that the materials from 
which it is made are worth at present less than the mate- 
rials from which a gold dollar is made. These two superfi- 
cial and universally conceded facts are sufificient to make 
them imagine themselves fully capable of writing and talk- 
ing about the silver question with an air of profound wis- 
dom. But, like all those who talk on any other subject 
without first giving it a careful examination, their state- 
ments and arguments are merely exhibitions of conceit 
and ignorance. < 

HISTORICAL SKETCH OF THE SILVER DOLLAR. 

The first United States law in regard to coining money 
was made April 2, 1792. That act prescribed that the 
gold dollar should contain 24 75-100 grains of pure gold, 
and the silver dollar 371^ grains of pure silver. From 
the first settlement of the country, the Spanish milled dollar 
had been the principal kind of metallic money in use 



ORIGIN OF THE SIL VER DOLLAR. 



189 



throughout the Colonies, and said act was framed with ref- 
erence to maintaining the existing coin with no change ex- 
cept the inscription thereon. " There shall be from time to 
time, struck and coined at the said mint, dollars or units, 
each to be of the value of a Spanish milled dollar, as the same 
is now current, and to contain 371^ grains of fine silver." 
The phrase, "As the same is now current," referred to the 
average weight of a number of silver dollars' taken from the 
circulation by direction of the Secretary of the Treasury, 
Alexander Hamilton, and assayed to determine the average 
amount of pure silver contained therein. 

Although the act of 1792 made gold a legal tender, silver 
continued to be the chief metallic money of this country. 

The aforesaid act fixed the relative value at one of gold 
to fifteen of silver. The leading European nations after- 
wards fixed the legal relative value of gold and silver at one 
of gold to fifteen and a half of silver. The result was that 
gold became legally worth more in Europe than in this 
country, and silver was legally worth less in Europe than 
here. In Europe an ounce of gold would buy fifteen and a 
half ounces of silver, but in this country it would buy only 
fifteen ounces. The gold eagle was worth a little more than 
ten silver dollars, and as both creditors and debtors had 
the option to make payments in either kind of money, the 
slightly cheaper money was employed. Then, as now, the 
great bulk of commerce was carried on without using either 
silver or gold dollars, but when metallic dollars were used 
the silver dollar was usually selected. 

On June 28, 1834, with a view of bringing both gold and 
silver into concurrent circulation. Congress passed a coinage 
law which left the weight of the silver dollar unchanged, 
but diminished the weight of the gold dollar to 23 20-100 
grains of pure gold. 

On January 18, 1837, Congress passed a coinage law which 
diminished the amount of alloy in the silver dollar, but left 
the amount of pure silver unchanged. The weight of the sil- 
ver dollar was thus changed from 416 grains to 412^ grains. 
The same law changed the fineness of the eagle from one 



IQO SOCIAL STRUGGLES. 

part of alloy to eleven parts of fine gold, to its present fine- 
ness — one part of alloy to nine parts of gold. This change 
was from one-twelfth to one-tenth alloy. At the same time 
the amount of pure gold in the dollar was increased 2-100 
of one grain. 

ACTS OF 1834 AND 1 837. 

The net result of the said acts of 1834 and 1837 was this: 
The amount of alloy was changed. The amount of pure 
silver in the silver dollar was left at the original amount, 
371^ grains. The amount of pure gold in a gold dollar 
was changed from 24 75-100 grains of pure gold to 23 22-100 
grains. 

Said acts reduced the weight of a gold dollar more than it 
should to have the legal value of gold in this country con- 
form to the legal value of gold in European nations ; to 
wit, one part of gold to I5>^ of silver. 

Instead of conforming to the European ratio, as should 
have been done, Congress changed the weights of the coins 
so that one pound of gold coins was equal in value to nearly 
16 pounds of silver ; or 15 988-1000 pounds, to speak accu- 
rately. This change increased the price of gold at the 
United States mints (that is, less gold was required to coin a 
dollar) to the extent of 6 589-1000 per cent. The value of 
a gold dollar coined by virtue of those acts was thus reduced 
to that extent. The effect of legislation on value once 
more became apparent soon after this change in the relative 
value of gold and silver at the mints in this country. 

American legislation decreed that about sixteen pounds 
of silver were required to buy one pound of gold. But the 
mints of Europe called one pound of gold worth only 151^ 
pounds of silver. A merchant could buy a pound of gold in 
Europe by giving I5>^ pounds of silver for it ; he could then 
bring that pound of gold to this country and sell it for nearly 
16 pounds of silver. After paying expenses of purchase, 
shipment and sale, a profit could be made by buying silver 
in this country for gold, taking the silver to Europe and sell- 
ing it there for gold. 



OPTION OF PA YMENT. 



191 



RELATIVE VALUE OF SILVER AND GOLD DOLLARS. 

From the passage of the act of 1834 until the demonetiza- 
tion of silver in 1873, the silver dollar was worth a little 
more than the gold dollar. The following table, furnished 
by the director of the mint, shows the relative value of the 
silver and the gold dollar from 1834 to 1873. 



P5 


or? „<; 


< 




< 


P |- 


"^ 


5'p^rt 


n 


3 JT'T 


7" 


s ^^ 






-< 




-• 






"^ 






sa;r 




5'S.p 






= ap 






"S-^ 2. 




CK!4- S£. 






crqj^ £. 






" =- 




° " 5* 






^ M '-" 






S'^'rt 




S^f-i? 






S-^S 




■n 




"■ 








Cents. 




Cents. 




Cents. 


1834 


101.62 


1848 


100.88 


1862 


104.16 


1835 


101.20 


1849 


101.30 


1863 


104.06 


1836 


101.72 


1850 


101.83 


1864 


104.06 


1837 


100.98 


185I 


103.42 


1865 


103.52 


1838 


100.88 


1852 


102.57 


1866 


103.63 


1839 


102.36 


1853 


104.26 


1867 


102.67 


1840 


102.36 


1854 


104.26 


I 1868 


102.57 


1 841 


101.88 


1855 


103-95 


! 1869 


102.47 


1842 


100.77 


1856 


103-95 


: 1870 


102.67 


1843 


100.34 


1857 


104.69 


1871 


102.57 


1844 


100.88 


1858 


103-95 


1872 


102.25 


1845 


100.46 


1859 


105.22 


1873 


100.46 


1846 


100.56 


i860 


104.58 






18 


47 


101.20 


186I 


103.10 









As appears from the foregoing table, gold was the cheaper 
metal for the entire period above named in this country. 
Meantime gold and silver at the ratio of 155^ of silver to one 
of gold circulated at an equality of value throughout France, 
Germany and the other leading nations of Europe. 



OPTION OF PAYMENT BY EITHER GOLD OR SILVER. 

In this country the steadily recognized right of all persons 
to make a required payment of " dollars," 'either in silver or 
in gold at his option, caused gold to be generally used in 
place of silver. No outcry was raised about the use of 
" cheap money," and no one was accused of dishonesty be- 
cause he did not make payments in silver, — the most valuable 



192 



SOCIAL STRUGGLES. 



kind of money. Compared with silver, gold was " depreci- 
ated," but the right to use it as a legal tender at the legal rate 
of 23 22-100 grains of pure gold was unquestionable. At the 
same time the right of any one to pay an obligation in silver 
dollars was fully established both by law and by public senti- 
ment. That comparatively few persons did so, but paid in 
the cheaper metal, did not in the least affect their right to 
make such a payment if they so desired. 

The reader will please here note the important fact that 
from 1792 up to 1873 the United States mints were open for 
the unlimited coinage of both gold and silver. Any holder 
of bullion, no matter whether it was gold or silver, could 
send it to the mints and have it coined at the public expense 
into the standard national coins. The idea of limiting the 
coinage of either silver or gold to a certain amount per 
month was unheard of. 

How this ancient and established order of things, and how 
the moral and legal right of all persons to choose in which 
one of the said methods they would make a payment re- 
quired of them, came to be changed so that the legal right 
no longer existed, we will next consider. 

Before proceeding further in the history of the coinage 
legislation of this country, several important points must be 
noted and borne in mind. 

First. Although both gold and silver were a legal tender 
for all purposes, and there was no restriction whatever on 
the coinage of either metal from 1792 to 1873, yet, in fact, 
one of the metals was constantly used as money more than 
the other. The other metal was not banished, — it remained 
a legal tender and was always used to some extent. The 
metal whose bullion value was lowest was employed as 
money far more than the metal whose bullion value for the 
time being was highest. This arose from two facts. 

TENDENCY OF COMMERCE. 

Commerce naturally seeks the least expensive modes of 
transaction. The fact that the least expensive money is al- 
ways used whenever a choice is possible is a simple thing 



ESTABLISHED RIGHT OE ALL PERSONS. jg^ 

which has been generally treated by "economists" as a 
wonderful law of finance. 

ESTABLISHED RIGHT OF BOTH CREDITORS AND DEBTORS. 

It was an implied part of every contract which called for 
the payment of a specified number of " dollars " that those 
dollars should consist of either one of the legal-tender mon- 
eys of the nation. This option naturally led persons who 
paid money, either as loans or in payment of debts of any 
kind, to employ the kind of " dollars " most readily ob- 
tained, and these were usually dollars whose bullion value 
was lowest. 

Second. It was the established policy of the country to 
have two kinds of legal-tender metallic money. The object 
was, by having a larger amount and variety of metal from 
which to coin money, to secure a greater stability of the 
value of the coins than was possible by the use of a single 
metal. It is more difficult to overturn a body with a large 
base than a body with a small base. A small body of water 
is much more easily raised or lowered in temperature than a 
large body of water. The larger the amount of valuable 
metal from which money is coined, the less that money is 
liable to vary in value. 

Although one of the precious metals for a time might be 
in use as money to only a small extent, yet it was still per- 
forming a useful function. It was standing guard over the 
fluctuations in value of the metal most in use, ready to step 
in and fill its place whenever a failure of mines, or an in- 
creased demand from any other cause, should unduly increase 
the value of the metal, which for some time had been cheap- 
est and most generally employed. The tendency of one of 
a pair of precious metals to act as a balance and check on 
an undue rise in the value of the other has been twice illus- 
trated in a marked manner by the history of our coinage. 

After the coinage act of 1834, silver rose in value, but no 
commercial disturbance occurred in consequence, because its 
fellow metal, gold, at once came into circulation and stead- 
ied values. After 1834, owing to the fact that silver was 
13 



jg. SOCIAL STRUGGLES. 

worth more for shipment abroad in form of bullion than for 
coinage in the standard dollar of 412}^ grains, compara- 
tively little silver was coined at the United States mints. 

The great money-lenders of Europe began the war on sil- 
ver at the Paris convention in 1867. Thereafter it was ap- 
prehended and foreseen that legislation would soon be en- 
acted which would place gold under such different condi- 
tions from what had existed from time immemorial that 
the demand for it, and consequently its value, would be 
largely increased. 

SILVER COINAGE. 

In 1868 the coinage of silver dollars at the United States 
mints was 54,800. In 1869 the value of gold had risen to 
such an extent that silver dollars, to a greater extent than 
previously, began to be coined at the United States mints^ 
and this coinage proceeded as follows : 

1869 '. . . 231,350 

1870 588,308 

1871 657,929 

1872 1,112,961 

1873 977,150 

EFFECT OF DEMONETIZING SILVER. 

It will be observed that the amount of coinage zvas steadily 
increasing Mttil 1873, when the coinage of silver dollars was 
stopped. The law stopping the coinage of silver dollars was 
passed February 12, 1873. The above figures therefore rep- 
resent only a fraction of 1873. There is every reason to 
T3elieve that if the coinage laws had not been tampered with, 
the coinage of silver dollars before the close of 1875 would 
have risen to forty millions per annum. Silver coinage, by 
diminishing the demand for gold, would have prevented the 
value of gold from rising to the price it reached at that time 
and soon after. This would have saved thousands from 
bankruptcy through forced sales at ruinously low prices. 
By giving stability to values, it would have averted the ap- 
prehension and fear of the future which paralyzed enter- 



EQUAL RIGHTS TO ALL. jqt 

prise and threw labor out of employment in 1876, 1877 ^^<i 
1878. 

Third. Prior to 1873, the chief argument of those op- 
posed to paper money was a recital of the fact that as the 
materials from which gold and silver coins are made are 
limited in their amount by nature, the value of metallic 
money is not subject to the caprice of legislators. They 
said : " Laws can readily change the value of paper money ; 
but it is generally admitted that legislators have no right to 
meddle with the coinage of metallic money, and thereby 
change existing contracts to the detriment of either debtor 
or creditor." 

Fourth. While comparatively few persons were familiar 
with the fact that the value of gold and silver, like all other 
values, is dependent entirely on surrounding conditions and 
circumstances, and that changes in those conditions and 
circumstances inevitably produce fluctuations in the value 
of those metals, it was universally known that it is much 
easier to obtain money in what are called " good times " 
than in periods which are called " hard times." In practi- 
cal application of the foregoing fact it was an implied 
part of every contract either to pay, or to receive money, at 
a specified future time, that both parties to the contract 
should incur an equal risk of the money being hard or easy 
to get, and therefore more or less valuable, when said time 
arrived. 

CONTAGIOUSNESS OF VICE. 

No disease is more contagious than vice. This is espe- 
cially so when vicious desires are put in form of criminal 
acts, and these acts are both committed and sanctioned by 
those whom the majority of the community regard as the 
best examples of rectitude. In 1869, as we have heretofore 
seen. Congress changed existing contracts and thereby com- 
mitted a colossal theft at the instigation of holders of 
United States bonds, and with the sanction of the majority, 
who claimed to be actuated by the purest principles of 
" honesty." The profitable result of this transaction nat- 



196 



SOCIAL STRUGGLES, 



urally led its authors and their imitators to consider and de- 
vise means of reaping another harvest from a similar legis- 
lative enactment which would insidiously change existing 
contracts, and practically carry out the following ideas pro- 
claimed, in substance, by the organs of the money-lenders : 

" The obligation to fulfill contracts does not apply impartially to all 
men under all circumstances. The debtor and the tax-payer are always 
bound to pay the exact number of dollars named in the contract ; but the 
creditor has a right to go to Congress and promote laws which will 
change his contract whenever events make it less advantageous to him 
than he hoped it would be when he made the bargain. The risk, which 
every one who makes a contract to be executed in the future inevitably 
incurs, that the word ' dollars ' shall then have a different meaning, 
should be borne only by the debtor and the tax-payer." 

FALSE DOCTRINES FRAMED INTO LAW. 

The foregoing ideas were slyly incorporated into law, Feb- 
ruary 12, 1873, by the cunning device of omitting from the 
revision of the coinage laws all mention of the silver dollar. 
This did not demonetize the dollars already coined. Con- 
sequently, there has never been a time when a silver dollar 
was not a legal-tender " coin " for all purposes. But this 
act changed the status of silver bullion and thereby, practL 
cally, if not in form, demonetized the silver dollar. 

By this act a vast amount of existing bonds, mortgages 
and other contracts, which were originally payable in either 
silver or gold dollars, at the option of the debtor, were made 
payable in gold dollars. At that time it was foreseen that 
silver would soon be chosen by the debtors as the means of 
payment if the bargain between them and their creditors 
were not altered by legislation, and emboldened by the suc- 
cess of the act of March 18, 1869, the money-lending inter- 
est procured the foregoing alteration of the contract exist- 
ing between them and their debtors. 

This change, which practically was a theft of hundreds 
of millions of dollars, was made with so little publicity that 
not one person in a hundred thousand had knowledge of it, 
until long afterward. The general public had no infor- 



WHO ARE GUILTY. ig-7 

mation whatever of what was being done. The statutes 
were revised in the committee room and quietly passed by 
Congress. Who the authors of this plot were, we do not 
know. But their existence and the class which they repre- 
sented can be stated with the same certainty that the nat- 
uralist describes birds whose foot-prints before historic times 
were left on the sands. The natural inference as to who 
instigated the aforesaid revision is conclusively proved cor- 
rect by the known facts that this legislation has ever since 
its passage been approved by the money-lenders. 

A man becomes responsible for the unauthorized and 
wrongful acts of his servant whenever he adopts and de- 
fends them as his own. A defender of unjust legislation is 
as guilty as those who enacted it. 

FUNDAMENTAL FACTS ABOUT GOLD AND SILVER. 

Before further considering the justice and wisdom of de- 
monetizing silver in this country let us briefly review the 
events in European countries which have made this ques- 
tion of such great importance. 

We have seen that up to 1872 silver and gold, at the ratio 
of fifteen and one-half ounces of silver to one of gold, circu- 
lated at an equality of value throughout Europe. In this 
country, at the ratio of nearly sixteen to one, the silver 
dollar was worth a little more than the gold dollar. At 
present the gold dollar is worth over 20 per cent, more 
than the silver dollar. What has made this change of rel- 
ative value ? Prior to 1872, it was almost universally taught 
and believed, the world over, that silver and gold had a 
"fixed value." Now it is generally stated that the value 
of silver is a " fluctuating value." If silver had a " fixed 
value " for centuries, what has recently made it fluctuate in 
value ? 

The physical qualities of both silver and gold are pre- 
cisely the same as they were at the earliest period of which 
we have knowledge. No change whatever has occurred in 
the inherent, intrinsic qualities of either one of those metals, 



198 



SOCIAL STRUGGLES. 



and therefore the change in their relative value cannot be 
due to such a cause. 

The natural laws under which silver and gold had a rel- 
ative value prior to 1872 are unchanged and unchangeable. 
Natural laws are never repealed either in whole or in part. 
Consequently we must dismiss the idea that a natural law 
gave silver a " fixed intrinsic value " up to 1872, and since 
that time this law has ceased to operate.* 

Since 1872 there has been an increased production of 
silver, but not enough to materially affect its total mass 

* The following statements and tables are taken from a pamphlet 
published by the National Bi-metallic Coinage Association, 1886. 

GOLD AND SILVER PRODUCTION. 

The advocates of the single gold standard have within the past few 
years raised the cry "of dearth of gold and abundance of silver." To 
probe the truth of this assertion we have only to compare the gold and 
silver productions in past times, starting our investigation and comparison 
with the discovery of America, A. D. 1492. 

The yearly average, according to the best authorities, — at the head of 
which Baron Alexander Von Humboldt's work, " Essai sur la Nouvelle 
Espagne," stands, — was about 5000 pounds of gold and 20,000 pounds, 
avoirdupois, of silver from 1493 to 1500. 

The fairest and most easily comprehended method of comparison 
would therefore be in groups of twenty years. 

world's production, estimated in pounds for twenty-year 

PERIODS. 



1 501 to 1520 

1 521 to 1540 

1 541 to 1560 

1 561 to 1580 

1 581 to 1600 

1601 to 1620 

1 62 1 to 1640 

1641 to 1660 

1661 to 1680 

1681 to 1700 

1 701 to 1720 

1 72 1 to 1740 

1741 to 1760 



Avoirdupois 
pounds. 

255,200 
315,040 
374-440 
300,960 
324,560 
352,880 
365,200 
385,880 
407,440 
473,660 
564,080 
839,520 
1,082,840 



Avoirdupois 
pounds. 

1 ,880,000 

3,968,800 

13,710,400 

13,178,000 

18,431,600 

18,607,600 

17,318,400 

16,017,200 

14,828,000 

I 5,043,600 

15,646,400 

18,972,800 

23,458,380 



GOLD AND SILVER PRODUCTION. 



199 



relative to the whole amount of gold in the world. Mean- 
while the whole amount of silver, compared with the 
volume of all other products of industry, has diminished. 
During the discussion about the silver bill in 1878, 
its opponents gravely stated that five hundred million 



YEARS. 


GOLD. 


SILVER. 


1761 to 1780 

1 78 1 to 1800. . 


Avoirdupois 
pounds. 

911,020 

782,760 

564,542 

759,010 

5,633,988 

7,920,264 


Avoirdupois 
pounds. 

28,718,560 

38,678,000 

22,039,260 

30,291,690 

36,876,870 

69,012,574 


1 80 1 to 1820 , . 


1 82 1 to 1 840 


1 841 to i860 

1861 to 1880 





The above returns show plainly that the production of gold has in- 
creased in much greater ratio than that of silver. Since 1741 to 1760, 
when the new mines of Brazil and Bolivia were discovered, up to the 
present day, the production of gold has increased sevenfold, while that of 
silver only threefold. 

world's production of precious metals, ESTIMATED IN DOL- 
LARS FOR DIFFERENT PERIODS. 

From 1 501 to 1883, inclusive. 



1501 

1601 

1701- 

1801- 

1851- 

1856- 

1861- 

1866 

1871 

1876 

1877 

1878 

1879 

1880 

1881 

1882 

188^ 



-1600 
-1700 
-1800 
-1850 
-1855 
-i860 
-1865 
-1870 
-1875 



$478,362,240 
800 
,480 
240 
880 



600 

1,272; 

793. 
661, 
689 

619 
642 

571, 

106, 

113. 
119, 
108, 

106, 

103, 



360,, 

392, 



788 
481 

416 



^947 
,092 

IT^ 
436 
023 

699: 
94,027,901 



480 
,200 
,480 
,588 

.173 
,786 
,807 
,786 
078 



PER CENT. 



383 years $7,180,252,387 



33-8 

27.2 

34-1 
35-9 
77.6 

77-9 
72.3 
69.0 

57-3 
517 
58.4 
55-7 
53-7 
52.4 
50.2 

47-3 
45.2 

or 45.6 



$972,267,840 

1 ,608,690,240 

2,464,1 19,360 

1,413,666,000 

191,400,960 

195,478,320 

237,828,960 

289,248,480 

425,395,920 

99.305.538 

81,040,655 

94,882,177 

96,172,628 

96,704,978 

102,168,354 

109,952,251 

114,217,733 



PER CENT. 



5,592,540,394 



66.2 
72.8 
65.9 
64.1 
22.4 
22.1 
27.7 
31.0 
42.7 

48.3 
41.6 

44-3 
46.3 
47.6 

49-8 
52.7 
54-8 



or 54.4 



200 



SOCIAL STRUGGLES. 



dollars' worth of solid silver lay exposed in the Andes ready 
to be sent to market and coined as soon as the chaos-pro- 
ducing silver bill should be enacted. But nothing has been 
since heard of this great mine. Therefore the theory that 
the relative fall in the value of silver is due to an increase 
in the production of silver mines must be placed in the list 
of fancies unsupported by facts.* 



world's production of gold and silver for 383 YEARS, ES- 
TIMATED IN DOLLARS, FOR DIFFERENT PERIODS OF TIME. 

From 1 501 to 1883, inclusive. 





GOLD. 


PER CENT. 


SILVER. 


PER CENT. 


x^o years 


$3,145,097,760 

3,184,861,920 

850,292,707 


32.8 
70.4 
51.8 


$6,458,743,440 

1.339,352,640 

794,444,314 


67.2 
29.6 
48.2 


21; vears 


8 years 


381 years 


$7,180,252,387 


45.6 


$8,592,540,394 


54-4 





The above tables show 'conclusively that the total production of gold 
since 1871 has been greater than the production of silver during that 
time. The fact of a relatively small increase in the production of silver 
for a few years does not change the total result. Since the time when 
the silver dollar of 412^ grs. was worth 2.57 per cent, more as bullion 
than the gold dollar of 25x^0 grs., as bullion, the relative production of 
those metals was as follows : 

Production of gold from 1871 to 1883 $1,421,709,187 

Production of silver from 1871 to 1883 $1,219,840,234 

Said figures demonstrate that the altered relative value of gold and silver 
is due to the altered condition produced by demonetizing silver. 

See statistics published in report of United States Silver Commission 
of 1877, and various reports of the director of the United States Mint 
since that date. Also statements of the Secretary of the Treasury made 
December, 1885, in appendix of this volume. 

* That one of two metals, both of which are a full legal tender with 
unlimited coinage, may be enormously increased in amount without suf- 
fering any considerable depreciation in value relative to the other metal, 
is fully shown by the results which have occurred at different periods 
after the world's stock of the precious metals has alternately been in- 
creased by the addition thereto of more silver than gold, or more gold 
than silver. 

One of the highest authorities on the precious metals, Prof. William P. 



FLUCTUATIONS IN VALUE OF SILVER. 20I 

Moreover, if such increased production did exist, while it 
would produce a fall in the value of silver, it could have no 
part in creating the new feature in the attributes of silver 
which those who favor gold as the sole currency declare its 
most objectionable quality; to wit, ^^ a fluctuating valued 
This gives us a greater interest in finding out why silver 
has lately taken to itself a quality which it never had be- 
fore, than to know why it has fallen relatively in value. 

We look in vain for an explanation of the recent facts 

Blake, computes the total production of gold and silver throughout the 
world from 1848 to 1868 as follows: 

Total production of gold $2,757,600,000 

Total production of silver 813,400,000 

Excess of gold production $1,944,200,000 

By reference to the table, published by the director of the United 
States mint, giving the relative value of a gold dollar of 25JQ grs., and a 
silver dollar of 412^ grs., at those periods, we find the relative value of 
those coins as follows : Value of a silver dollar of 41 2^ grs. stated in gold, 
in 1848, was 100.88, and 102.57 in 1868. 

Thus it appears that the production of over nineteen hundred million 
dollars' worth of gold, from 1848 to 1868, in excess of the production of 
silver, made a difference in the relative value of the gold and the silver 
dollar of only one and sixty-nine hundredths per cent. 

The reason of this fact is obvious when the nature of value is borne in 
mind. So long as both metals are a full legal tender and have unlimited 
coinage, they both perform the same monetary functions, and, as the raw 
material of money, are under similar conditions. Relative to all other 
commodities, they may both either rise or fall in value, while their re- 
spective values, relative to eacli otJier, have undergone comparatively 
little change. Thus, for the forty years immediately preceding 1848, 
according to Prof. Jevons, both gold and silver, relative to all other com- 
modities, rose 145 per cent, in value. Meanwhile their value, relative to 
each other, was substantially unchanged. 

If during that time one of those metals had been generally demone- 
tized, a material change would at once have occurred in the conditions 
under which it was placed, and a wide divergence of its value, relative to 
the other metal, would have inevitably resulted from the altered condi- 
tions. 

From 1848 to 1868, both gold and silver, relative to all other commod- 
ities, fell over 20 per cent, in value. This was due to the great produc- 



202 SOCIAL STRUGGLES. 

regarding silver until we turn to the legislation of European 
countries. We then find a series of enactments which took 
place just before the aforesaid changes in the relative value 
of silver, and we observe that these changes became more 
marked just in proportion to the number and power of 
those legislative forces. Cause and effect are closely linked 
together; and, as we shall hereafter see, the probable cause 
is amply sufficient to produce the obvious effect. 

ATTEMPT TO DEMONETIZE GOLD. 

Europe is mostly governed on the theory that the rich 
and the privileged should make and administer the laws for 
their own benefit just as far as can safely be done without 
risk of goading the masses of the population to desperation, 
and thereby bringing on a revolution which might endanger 
both the property and lives of those now the dominant 
classes. The creditor classes make the laws of Europe. 
The debtors and tax-payers perform most of the labor, and 
support both themselves and the governing classes. 

Shortly after the discovery of gold in California and Aus- 
tralia, the ruling classes of Europe became anxious lest 
that event should impair the value of their bonds, and thus 
lessen the amount of labor and tribute rendered them in 
form of interest, salaries and rents. Hence they began to 
devise means whereby their just obligations to receive a 
certain amount of coin in payment of debts could be repu- 
diated under the plausible pretense of a measure for " the 
public interest." The proposition to demonetize gold and 
make silver the sole legal tender was discussed with consid- 

tion of gold during that period. But, as heretofore seen, the value of 
those metals, relative to each other, underwent comparatively little 
change, as both were largely under similar conditions ; to wit, 
legal tender with unlimited coinage. An increase in the production of 
gold depreciated the Value of silver to nearly the same extent that it did 
the value of gold. In like manner, an increased production of silver 
would have nearly the same effect on the value of gold as on the value 
of silver ; provided both metals were full legal tenders with unlimited 
coinaee. 



INCREASED USE OF GOLD. 



203 



erable prospect of its general adoption. Holland in 1847 
had demonetized gold. Prussia and Austria in 1857 prac- 
tically made silver their sole legal-tender money. The 
movement for the demonetization of gold would probably 
have become general throughout Continental Europe had 
it not been for the attitude of France. That nation 
retained a lively remembrance of the lurid event called the 
French Revolution, when the masses, maddened by oppres- 
sion, arose and spread flame and carnage through the land. 
France retained the double standard of both gold and silver 
at the ratio adopted by her in 1803, to wit: one of gold to 
15^ of silver. This probably saved the world in i860 from 
a financial crisis caused by demonetizing gold, similar to the 
perturbations now existing from the disuse of silver. 

In 1857 the annual production of gold declined, and has 
on the average declined steadily from that time to the 
present. Knowledge of this fact has stopped all agitation 
in favor of making silver the sole legal tender. 

PRESENT CONSUMPTION OF GOLD IN THE ARTS. 

Neither the production of gold, nor the amount of it 
used in the arts, is ever accurately known. Our knowledge 
of such things is necessarily approximate. But from the 
most careful estimates made, the conclusion is reached that 
the annual consumption of gold in the arts has so increased 
that it now exceeds half the yearly product of the mines. 
Thus the constantly increasing growth of commerce and 
population is not met with a corresponding increase in the 
metal which several nations now use as almost the sole ma- 
terial from which to manufacture money. 

ORIGIN OF THE WAR ON SILVER. 

In 1 861 the Nevada silver mines attracted attention, and 
during that year produced about two million dollars' worth 
of silver. The production steadily rose until 1867, when 
the annual product reached thirteen and a half millions. 
Coupled with this actual increase of silver production, the 
most extravagant reports of the discovery of solid masses 



204 SOCIAL STRUGGLES. 

of silver were published.* These statements were circu- 
lated in Europe, and produced a profound impression 
among the money-lenders. 

The agitation a few years previously in favor of demone- 
tizing gold had attracted their attention to the feasibility 
of increasing the value of money by diminishing the num- 
ber of metals from which it could be coined. They were 
somewhat alarmed ; and all experience tells us there is noth- 
ing at once so unreasoning and so remorseless as frightened 
selfishness. The tide of sentiment among the ruling classes, 
that a few years before had been flowing in favor of demon- 
etizing gold, now turned toward striking silver out of the 
statute books as a legal-tender money. But this change 
was one of form, and not of substance. In both cases the 
essence and intent of the proposed diminution of the legal- 
tender metals was to add to the wealth of the creditor 
classes by making money and obligations to pay money 
more valuable by lessening the volume of legal coins. 

* Mr. Ross Browne, an agent of the United States, wrote a report con- 
taining the following : 

"The time is not far distant when the price of the precious met- 
als, as compared with other proceeds of human labor, must fall. The 
vast improvements that have been made both in gold and silver mining, 

within the last 20 years, are applied only to a few mines If all the 

argentiferous lodes of Mexico, Peru and Bolivia, known to be rich, were 
worked with the machinery used at Washoe, their yield would really 
flood the world New^ deposits of silver will be found, and innu- 
merable rich lodes on the Pacific slope of the United States, not yet 
opened, will be worked with profit. The present enhanced prices of 
commodities and labor, the world over, measure, to some extent, the in- 
creasing quantity and consequent depreciation in the value of the precious 

metals, and clearly indicate the direction the change is taking 

These two streams of the precious metals, poured into the current of 
commerce in full volume, will produce perturbations marked and impor- 
tant The creditor, public and private, will be affected by this 

tendency." 

Events have conclusively shown the gross error of the aforesaid report. 



WA YS THA T ARE DARK. 



AN OLD SUBTERFUGE, 



205 



In 1867 a so-called monetary convention was held in 
Paris. The ostensible purpose of this meeting was to ena- 
ble scientific men to confer and decide what constituted 
the best kind of money. Its real purpose was to create a 
pretext that would enable the ruling classes, under the 
guise of a scientific reform, to make gold the sole legal- 
tender coin, and thus add to the wealth of the promoters of 
this " scientific " scheme. As was well known before the 
convention met, the so-called "scientists," who in fact were 
merely the servants and attorneys of the money-lenders, 
found that gold should be made the sole legal tender. 

Of all the tricks which have been employed in this 
hypocritical world to deceive mankind, that of calling a 
meeting of pretended authorities on a certain subject for 
the purpose of delivering an opinion known beforehand by 
the projectors of the meeting, is at once the most frequent 
and ancient. Formerly, chieftains who wanted to rob 
another people would call a meeting of priests under pre- 
text of a desire to learn whether the Lord favored their 
scheme. These conventions invariably found an exact 
coincidence between the desires of their masters and the 
mind of the Supreme Being. Thereupon the enterprise 
was pronounced a holy war, and carried on with great zeal 
and piety. Recently, great crimes have been committed 
and justified under the pretense that such conduct was in 
accordance with the most profound teachings of science, 
and in harmony with natural laws which decree the " sur- 
vival of the fittest." 

On December 4, 1871, Germany began to incorporate 
the doctrines of the Paris convention into law. She then 
stopped the coinage of silver and began to coin gold. July 
9, 1873, another law was passed which provided that after 
three months* notice, thereafter to be given, gold should be 
the sole legal-tender coin, except for small change. The 
practical effect of these laws was an immediate change in 
the conditions surrounding gold and silver. An increased 



2q6. social struggles. 

demand arose for gold, and this at once increased its rela- 
tive value as compared with silver. Prices of labor and 
commodities fell, and an era of " hard times," from which 
she has not yet recovered, settled upon Germany. 

On the 1 8th of December, 1872, by a convention between 
the different States, Sweden, Norway and Denmark 
adopted gold as the legal-tender money and demonetized 
silver, except for small change. Each of these countries 
has since that time carried out the provisions of said con- 
vention. 

In 1876 Spain announced her intention to make gold the 
legal-tender money of that country. In 1874 the Latin 
union, composed of France, Belgium, Italy, Switzerland 
and Greece, made a treaty which limited the coinage of sil- 
ver in their different countries. The object of this union 
appears to be to unite those nations in such a common pol- 
icy regarding coinage as events may make appear best for 
the interest of the governing classes of those countries. In 
1873 Holland temporarily suspended silver coinage. She 
afterward resumed coinage until 1875, when its suspension 
was ordered. 

Japan has also recently made gold the national money. 
A large amount of gold will continually be required by the 
millions of that country. 

EFFECT OF LEGISLATION ON THE VALUE OF A DOLLAR. 

Let US now consider the practical effect on the value of 
gold which has been produced by the aforesaid legislation. 
In order to do this we must first consider facts which deter- 
mine the value of money. 

The value of a pound, a franc, a dollar, or any other one 
of the units which form a national money is chiefly deter- 
mined by the number of those units in circulation. An 
increase in the total amount of money tends to diminish 
the value of each one of the units which compose it. A 
diminution in the total amount of money tends to increase 
the value of each one of the units of which the money con- 
sists. Whether these units be called pounds, dollars or 



RELATIVE USE, RELATIVE VALUE. 207 

any other name, makes no difference in the result of increas- 
ing or diminishing their number. 

But the aforesaid effects are produced by an increase or 
a diminution in the number of monetary units relative to 
the amount of business they are used to transact. If the 
amount of money in a certain country, or in the world, 
remain stationary, and the population, wealth and com- 
merce increase, the value of money rises because its amount 
is lessened relative to the duties it performs. Therefore it 
follows that the relation ivhich the amount of money in a 
country bears to its use is the dominant thing which 
determines the value of one of the units of that money. 
If the use for money remain stationary, and its amount be 
diminished, the value of the remainder is enhanced. If the 
amount of money be increased relative to the demand for it, 
the value of each one of the units of that money is dimin- 
ished. The absolute amount of money in a country may 
be increased without diminishing the value of each one of 
its components, provided this increase coincides with an 
increase in the wealth, population and commerce of that 
country. In such case, the relative amount of money is 
unchanged, and therefore its value is not affected. 

VALUE OF ALL THINGS DEPENDENT ON THE SAME LAW. 

The value of potatoes depends on the number of bushels 
in market relative to the demand for them. The value 
of the units which form the national money depends on 
the same principles as the value of potatoes. 

The aforesaid principles and facts, and kindred ones 
which flow from them, arise from changes in the conditions 
and circumstances under which money is placed. If ten 
men be required to properly manage a ship in mid-ocean 
and three of them die, additional duties are thrown on the 
survivors and the services of each individual becomes more 
valuable. On the other hand, if thirteen men occupy a 
place, the duties of which can readily be performed by ten, 
the labor of each one of the thirteen is less valuable than it 
would be if he performed one-tenth the total labor. The 



2o8 SOCIAL STRUGGLES. 

value of each man's service depends on the circumstances 
under which that labor is performed, and a similar thing, 
for a kindred reason, is true of the value of each one of the 
units which form a national currency. 

The control of legislation over the value of money arises 
from the power to change the conditions which surround it 
by increasing or diminishing its amount. As money is 
used to compute the value of all other things, it follows 
that legislation, by changing the relative amount of 
money, can affect the price of labor, and of everything 
bought and sold in the country governed by such legisla- 
tion. As the amount of debts due from individuals, 
corporations, municipalities and nations is constantly 
enormous, and as the obligations which represent those 
debts call for the payment of a certain number of tmits, 
without regard to the value of each one of them, it also 
follows that any material change in the value of money 
caused by legislative enactment is always a legal robbery of 
either the creditor or the debtor class. 

AN EXAMPLE OF LEGISLATIVE THEFT. 

A borrows $1500 of B and agrees to repay him ten years 
thereafter. When the loan was made the wages of a com- 
mon laborer were, and for a long time had been, $1.50 per 
day and wheat was worth $1.50 per bushel. The loan there- 
fore represented one thousand days' wages, or one thousand 
bushels of wheat. 

Before the ten years expire silver is demonetized, the 
number of coins in circulation is diminished and each one 
of those remaining becomes scarcer and more valuable. 
Wages fall to one dollar per day and wheat to one dollar 
per bushel. When the debt falls due it represents fifteen 
hundred days' labor, or fifteen hundred bushels of wheat. 
The debtor cannot say to the creditor: "I borrowed the 
value of one thousand days' labor, or one thousand bushels 
of wheat. A thousand dollars will now buy either of those 
things. Here are your thousand dollars." He must pay 
the number of dollars called for by the contract, not the 



A SPECIMEN CONlE/iSATION. 



209 



amount of value represented by those dollars. This is so 
simple a matter that it is strange many otherwise intelli- 
gent people are puzzled by it. 

A TALK WITH A CLERGYMAN. 

Let us illustrate this by an actual occurrence. In the 
winter of 1877, ^ clergyman, of the kind usually styled "in- 
tellectual," asked what had best be done with one of his 
debtors who had recently failed to pay the interest on a 
mortgage which the reverend gentleman held on the debt- 
or's house. The clergyman said : "As provisions, clothing 
and coal are all cheaper now than when he paid his interest, 
I do not see any good reason for such neglect of duty." 
" How much is the interest on your mortgage?" 
" Sixty dollars a year ; this is precisely the same that it 
was when it was promptly paid." 
" How does this man get money?" 

" He has a horse and cart, and works with them himself 
by the day." 

" Then, in order to get a living his only resource is to sell 
his own labor and that of his horse from day to day. How 
much did he daily get from such a sale when the loan was 
made ? " 

" I never thought that a man who worked for wages sold 
anything. But I don't know but it is so. I believe he 
said that he got four dollars a day, and so I thought the 
loan was safe." 

" Then, when he got the money, the sale of fifteen days' 
work would pay a year's interest. What does he now get 
from the sale of a day's wages ? " 

" He told me that owing to lower wages and enforced 
idleness he did not average over a dollar and a half a day." 
" Do you not see that it now takes forty days' labor to 
pay your interest instead of fifteen days' ? " 

" I had not thought of the matter in that light. But you 
must concede that it does not cost him as much to live as it 
did." 

" It is true that his expenses cost a less number of 
14 



2IO 



SOCIAL STRUGGLES. 



' dollars ' than they did. But that is a delusive test. The 
only way this man has to pay his expenses is from the sale 
of his labor. He cannot sell a day's labor for as much, and as 
many, of the necessaries of life now as he could five years 
ago. Therefore, his living costs him, of what he has for 
sale, more now than then. Furthermore, the interest must 
be paid from what is left after the things absolutely 
needful to keep himself and family alive are first paid for." 

" I suspect your views on political economy are new, 
and not in harmony with established authorities. A gold 
dollar has always a fixed value." 

" Can your debtor get as many gold dollars now for a 
week's work as he could a few years ago ? " 

" I believe not. But that has nothing to do with the 
matter. This conversation is growing unpleasant. Good- 
morning." 

ONE PURPOSE UNDER VARIOUS PRETENSES. 

Under various pretexts, silver was demonetized both in 
Europe and in this country for the express purpose of mak- 
ing the remaining money more valuable.* The practical ef- 
fect was precisely the same as would have occurred if, in- 
stead of demonetizing silver, the weight of both the silver 
and the gold coins had been increased. An increased 
amount of metal in each coin would have necessitated a 
diminution in the number of those coins, and the present 
results would have been produced with both silver and gold 
coins in their former position of legal tenders. The dis- 
honesty of the transaction would then have been plainer 
than at present, but no greater. 

* A large number of persons have favored making gold the sole legal 
tender, wathout any desire to commit an injustice. But those ignorant 
of the inevitable result of such a measure are merely private soldiers in 
an army whose officers have a definite purpose which they know will be 
accomplished by diminishing the amount of metal from which legal 
tender can be coined. This is shown by the pertinacity with which they 
adhere to their scheme after its mischievous nature has been fully dem- 
onstrated. 



DANGER OF ROBBING OTHERS. 



211 



As heretofore stated, it was formerly held sound doctrine 
that the number, and therefore the value, of coins could 
only be justly modified by a relative increase or decrease in 
the amount of gold and silver bullion in the world ; and 
that the risk of the occurrence of one or other of these con- 
tingencies should be borne equally by all parties to con- 
tracts to be executed at a future time. Judging from the 
past history of the production of gold and silver mines, it 
, was deemed improbable that such semi-natural causes 
would occasion any change in the value of either gold or 
silver rapidly enough to make a serious difference in their 
value within a few years. Upon this presumption, coupled 
with the idea that legislative interference with the value of 
coins was unlikely to occur, lay the supposed great advan- 
tage of a metallic over a paper currency. But the idea that 
legislatures should not meddle with the value of coins has 
recently been practically abandoned. 

A DOCTRINE DANGEROUS TO CREDITORS. 

In Europe, under the thin pretense of " establishing a 
scientific currency," and in this country of "honesty," the 
coinage laws have been changed by the creditor class, 
thereby changing and repudiating their own bargains for 
the sole and express purpose of robbing the debtor and the 
laboring classes. The old idea that the value of metallic 
money was not, and of right ought not to be dependent on 
the caprice of legislators has been virtually replaced by the 
doctrine that governments of right ought to change the 
value of metallic money whenever in their judgment such 
change is necessary to promote the interests of the creditor 
class. The essence of all the clamor which is raised in this 
country for "honest money " is the dangerous doctrine 
that the majority in Congress have a right to change the 
standard of value, and enact laws which will legalize rob- 
bery ; provided, it be done in the interest of creditors and 
under pretense of " honesty." 

If the class in control of the Government have a right 
to do as they have recently done, then it logically follows 



212 SOCIAL STRUGGLES. 

that if the debtor class should obtain legal power it would 
have the right to make laws, the practical effect of which 
would be to rob the creditors. With justice equal to the 
demonetization of silver, the debtors might enact a decrease 
in the weight, and consequently an increase in the number, 
and a decrease in the value of both gold and silver legal- 
tender coins. In such case the aforesaid supposed debt of 
A could be paid with seven hundred and fifty days' labor, 
or seven hundred and fifty bushels of wheat, because wages 
would then advance to two dollars per day and wheat to 
two dollars per bushel, or perhaps to still higher prices. 

OUGHT THE SILVER DOLLAR TO BE MADE HEAVIER? 

Without having studied the matter, many well disposed 
people have been led by plausible arguments to favor an in- 
crease in the weight of the silver doll-ar as a just solution of 
the silver problem. The exact nature of this proposition 
can perhaps be more easily seen by using an example. 

Suppose a number of persons should contract to purchase 
one hundred million bushels of wheat, to be delivered five 
years hence at one dollar per bushel. Suppose they should, 
after making this contract, manipulate legislation and have 
the size of the bushel measure increased to thirty-six quarts, 
and should justify their conduct by saying that as wheat 
had fallen in value, " honesty, morality and religion" sanc- 
tioned an increase in the size of a bushel. Suppose the 
sellers of the wheat should ask for a restoration of the old 
standard and the buyers should then call them " repudia- 
tors " who wanted "cheap" bushels. Would not the 
sellers of the wheat justly have a poor opinion of the hon- 
esty of the buyers? Those who denounce the old 412^ 
grain dollar act precisely as the buyers in the above sup- 
posed case. They want to change the size of the bushel : 
they ask that the bargain be violated and more grains put 
in place of the agreed number. 



JUSTICE IS THE ONLY SAFETY. 213 

DANGER OF ROBBING DEBTORS. 

These men have not considered what results micrht flow 
from the success of their schemes. 

If Congress can justly increase the weight of the silver 
dollar, it has a right to increase the weight of the gold dol- 
lar. It also follows that Congress has a right to diminish 
the weight of both the gold and the silver dollar. 

In general terms, the Southern and Western States are the 
debtor States ; the Eastern States, Pennsylvania and New 
York are the creditor States. Suppose the debtor States 
should obtain control of the national Government, and, 
smarting under a sense of unjust dealing, should say to the 
creditor States : " You have robbed us by increasing the 
value of coins. You have changed the meaning of the 
word dollar.' Now, to make things equal, we will give 
you a taste of your own medicine. We will change the 
meaning of the word dollar in our interest." 

When a class in control of the Government use their power 
for the purpose of legally plundering others, they have no 
right to complain if the tide turn and the robbed becomes 
the robber. History is full of such retribution. 

When public policy requires a change in any of the stand- 
ards of coinage, the sanctity of existing contracts should be 
respected : the new money should apply only to new con- 
tracts. If this obviously just principle were adopted, and 
suitable measures taken to prevent its evasion by unscrupu- 
lous persons, the clamor for an "honest silver dollar" 
would immediately end, as its motive would be gone. 

DEBT NOT DISREPUTABLE. 

For the past twenty years a persistent effort has been 
made to covertly teach the doctrine that it is disreputable 
to be in debt, and that therefore the laws should be made 
to aggrandize creditors at the expense of debtors. Curi- 
ously enough, these doctrines are put forth by men. who are 
constantly asserting that legislation has no effect upon 
value. 



214 



SOCIAL STRUGGLES. 



No one can borrow without some one will lend. If the 
borrower commit a wrong by so doing, the lender is an 
equal partaker in the crime. If a city, a State, or a nation, 
do a disreputable act by borrowing money, then every 
owner of one of their bonds is a criminal. 

Commerce and industry derive a great impetus from the 
modern system of banks, by means of which small sums are 
aggregated, and then loaned to industrious and skillful per- 
sons in .need of additional capital. Banks are thus the tools 
for collecting little rills of capital and uniting them into 
broad streams which turn the wheels of trade. What 
would become of our savings banks and our banks of de- 
posit if no one would borrow their money ? How would 
the orphan and the widow be supported if no one 
would hire the money which a provident father and hus- 
band had accumulated for them ? The only way in which 
a person can live in a civilized country and not either di- 
rectly or indirectly sustain the relation of debtor or creditor, 
is to become a criminal or a pauper and be supported by 
others. The cry " every man out of debt," if not a delu- 
sion and an attempt to divert attention from a wrong, 
would mean a return to barbarism. 

THE TRUE DOCTRINE. 

Equal and exact justice to all men is the correct doc- 
trine. Both borrower and lender should have equal legal 
protection as both relations are equally meritorious. Any 
means whereby debtors or tax-payers are made to pay more 
than they agreed to are therefore just as wrongful as 
measures which defraud creditors. 

NOTHING IS MORE DETESTABLE THAN HYPOCRISY. 

A curious trait of human nature almost invariably leads 
those who wrong others to add abuse and defamation to 
the wrong committed. This is apparently done to afford a 
pretext and justification for the aggressor's evil acts. The 
English people recently added one to the thousands of pre- 
viously existing illustrations of this ignoble characteristic of 



MEANNESS OF HYPOCRITES. 



215 



mankind. They sent their army into Africa on an errand 
of robbery and murder, and, not content with this, the Eng- 
lish press styled the men who were fighting against pirates 
for the protection of their homes and country, *' barbarous 
rebels" and " ignorant fanatics." 

Mr. Rogers, in his scholarly " History of Work and Wages 
in England," accurately describes this form of hypocrisy in 
saying : " The charge of setting class against class has 
always been made by those who wish to disguise their own 
indefensible advantages by calumniating the efforts of those 
who discover abuses and strive to rectiiy them. Liberty 
and property, the two conditions of social order, have been 
invoked as names by those who know nothing of any lib- 
erty but their own privilege to do wrong, and no property 
but that which custom has allowed them to appropriate." 

THE CRY FOR HONESTY. 

Those who have, for the past twenty years, been at work 
altering bonds justly payable in greenbacks into bonds 
payable in coin, and changing contracts by demonetizing 
silver, thus legally robbing debtors and tax-payers, have 
kept up a doleful howl about the " dishonesty " of the men 
they were intent on robbing. A desire for a currency 
whose value is as stable as is possible to create, and a wil- 
lingness to do just as agreed and no more, have been de- 
nounced as " repudiation, inflation " and a " destruction 
of national credit." Meanwhile the " honesty " of measures 
which increased the burdens of debtors and tax-payers be- 
yond the original contract has been loudly proclaimed. 
This din of sophistry and falsehood has confused the minds 
of many persons. 

Let us endeavor to make this matter clear by an illustra- 
tion which is a faithful picture of the aforesaid conduct. 
Suppose a man should lease a farm for fifty years at a 
yearly rental of two hundred bushels of wheat or four 
hundred bushels of corn, the kind of grain to be at 
the option of the tenant. For a long time wheat is not 
worth twice as much as corn, and the rent is paid in 



2i6 SOCIAL STRUGGLES. 

wheat. Finally, in consequence of a great demand for 
wheat, its price rises so high that four hundred bushels 
of corn are worth less than two hundred bushels of wheat. 
The tenant comes to pay his rent and brings with him four 
hundred bushels of corn. Now, suppose the landlord, in- 
stead of doing as he agreed, should cry out : " What a 
scoundrel you are ! This corn is dishonest corn. Corn 
has begun to fluctuate in value. Let us be honest. Let 
us strike corn out of the contract, so that the rent shall 
hereafter be paid in wheat." 

The farmer naturally objects to this proposition, and then 
the landlord induces Congress to pass a law, the practical 
effect of which is to prevent the tenant from paying his 
rent in anything but wheat, although events have made it 
probable that wheat will continue to be much higher than 
it was when the farm was first hired. 

There is only one thing lacking in this hypothetical case 
to make it a perfect parallel to the conduct of those who 
have procured legislation whereby contracts payable either 
in gold or silver, at the debtor's option, were, practically, 
made payable only in gold. That lacking thing would be 
for the landlord to first succeed in having laws passed which 
would increase the demand for wheat and thus raise its 
value, and then get other laws passed which would prevent 
the debtor from paying his rent in corn. 

The cry for the stoppage of silver coinage comes from 
those creditors who want to strike the silver corn out of 
the contract and compel the debtors and tax-payers to pay 
the golden wheat. They want legislation which will save 
them from the necessity of doing as they have agreed. 

If the creditors have a right to go to Congress and ask 
protection against the silver dollar because recent events 
have lowered its relative value, is it not certain that the 
debtors and tax-payers have an equal right to protection 
against the gold dollar which has been raised in value ? 
Every one will admit that it would be wrong to directly 
increase the value of a gold dollar by increasing its weight. 
Therefore, is it not equally wrong to raise the weight of a 



I 



INCONVENIENCE OF BOTH GOLD AND SILVER. 217 

gold dollar indirectly by striking silver from its ancient 
place as a legal tender, thereby changing the conditions 
under which gold is placed, and largely increasing its value ? 

GROUNDLESS CHARGES AGAINST SILVER. 

In 187 1 Germany began the war against silver on the 
plea of wishing to create for the Empire " a single standard 
which should have a fixed and unvarying value." The na- 
tions who followed the course of Germany did so on the 
assumption that a currency of gold protected them from the 
" fluctuations in value " to which silver had become subject 
since Germany struck it from her statute books as a legal 
tender. Those who advocate the policy of the United 
States demonetizing silver rest their case almost entirely 
upon the alleged fluctuations in the value of silver and the 
stability. of the value of gold. 

The fact that a million dollars' worth of silver is about 
sixteen times as heavy as a million dollars' worth of gold is 
virtually conceded to be of little importance, for two rea- 
sons : First. Although silver is much the heaviest, it costs 
but little more to transport it from place to place than it 
does to carry the same value in gold. The increased weight 
is counterbalanced by the diminished danger of theft. 
A thief could readily seize five thousand dollars' worth of 
gold coins and escape with them ; but five thousand silver 
dollars would encumber him enough to make his capture 
easy. 

Second. The bulk and weight of silver is readily obviated 
by depositing it in the Treasury vaults and issuing paper 
certificates therefor. These do not weigh any more and 
are just as convenient to use as certificates payable in gold. 
A paper certificate for the payment of twenty silver dol- 
lars is far more convenient than a twenty-dollar gold coin, 
and is far more secure against the devices of counterfeiters. 

WHY SILVER DOES NOT CIRCULATE. 

A great outcry has been made by the enemies of silver 
that the silver dollar does not circulate because of its in- 



2l8 



SOCIAL STRUGGLES. 



convenient size and weight. This is a dishonest quibble. 
The plain fact is that the gold dollar does not circulate any- 
more freely than the silver dollar. The people prefer paper 
money to either gold or silver. In England, with gold the 
sole legal tender, it is estimated that over ninety-nine per 
cent, of all payments are made without using gold. 

The number of millions of silver dollars lying idle in the 
Treasury vaults has been cited a multitude of times. But 
candor requires that with this undoubted fact two other 
facts should be stated. First. That the Secretaries of the 
Treasury have steadily exerted their influence to hinder the 
payment from the Treasury of the silver dollar. Second. 
That while the amount of silver dollars lying idle in the 
Treasury has been large, the amount of idle gold has been 
still larger. Every argument against silver on the score of 
convenience applies to gold, although not to so great an ex- 
tent. But the use of gold coins to any considerable extent 
as money is inconvenient and entails great hazard, both 
from accidental loss and from theft. 



SUPERIORITY OF PAPER MONEY. 

The world has largely outgrown the actual handling of 
gold in ordinary commercial transactions. Whether the. 
sum transferred from hand to hand be one dollar or a million 
dollars, both silver and gold are inferior in convenience to 
paper money. 

Prior to the discovery of America, the invention of print- 
ing, and before the beginning of what Mr. Lecky calls the 
" industrial age," the bulk of commerce was carried on by 
barter, and by a metallic currency. But as soon as trade 
felt the quickening force of new ideas and inventions, it not 
only became difficult to transact business with such cum- 
brous mechanism, but this difficulty was enormously en- 
larged by the increased ability which dishonest men pos- 
sessed to debase and counterfeit the currency. In 1609, 
the evils of counterfeit, worn and defaced coins, and the 
labor, expense and danger attendant upon counting and 
transferring genuine coins became so great that the Bank of 



COUNTERFEIT MONEY. 



219 



Amsterdam was established in what was then one of the chief 
commercial cities of the world. This was a bank of de- 
posit ; it received all kinds of coins, ascertained their value, 
and issued paper certificates therefor. Bank-notes had not 
come into use, and the title to the coin was transferred upon 
the books of the bank. Purchases and sales were made by 
a transfer of credits. The avowed object of the bank was 
to avoid the nuisance of debased and spurious coins. 

An immense business was done by this bank. The 
amount of treasure in its vaults was variously estimated at 
from twenty-five to four hundred millions of dollars ; but 
as public scrutiny of its affairs was not allowed, no one 
knew how much coin it really held. The commercial 
world, however, had perfect confidence in the bank until 
1790, when it was discovered that a large amount of its treas- 
ures had been loaned fifty years before ; and that the 
balance had been steadily diminishing since then, so that 
only a small portion remained. The bank then failed. 

For the long time during which the credits and the paper 
of the bank had little coin " back of them," they transacted 
an immense business ; hundreds of millions were bought 
and sold just as well and effectually as if the coin had been 
lying in the bank vaults. Had the facts not become 
known, the bank might have continued doing business in 
that way for all time. The explanation of this is simple 
when viewed from a correct standpoint. The credits and 
the paper of the bank were not used, or issued, in excess 
of the wants of trade ; they were limited in amount ; they 
performed the same functions as coin, and were surrounded 
by similar conditions. 

Besides its superior convenience, paper money, es- 
pecially Government paper money, has another great advan- 
tage over gold coins, viz., it is far more difficult to counter- 
feit. This is because the machinery necessary to perform 
the elaborate and delicate engraving on paper money is very 
expensive and ponderous, and can neither be made nor ope- 
rated without considerable publicity. A single bank can 
easily emit notes which its officials will readily distinguish 



220 SOCIAL STRUGGLES. 

from spurious imitations, but the expense of making bills 
so that the whole nation will be protected from counterfeits 
is so great that the tendency is for banks of issue to avoid 
it, except only so far as is thought necessary for the bank's 
self-interest. Many of us remember when a counterfeit de- 
tector was part of the furniture of every office, store and 
shop. Since our paper money has been made by the Gov- 
ernment, the losses of the people from counterfeit currency 
have been trifling compared with what they were before 
the war. As protection of the people from knaves is one of 
the chief functions of Government, it follows that the mak- 
ing of paper money should be exclusively in its hands. 
And it also follows that after it has incurred the great ex- 
pense of machinery which will bid defiance to counterfeit- 
ers, that whatever saving or gain of interest may result 
therefrom belongs to the Government, and not to any class. 

As an argument against silver it is stated that silver has 
depreciated since 1872, and, worse than that, has now ob- 
tained " a fluctuating value." Curiously enough, none of 
the multitudes who accept these statements as true have 
made any serious attempt to explain such a startling phe- 
nomenon, but have passed it by as an unknowable freak of 
natural laws. But if these beliefs be true, what assurance 
have we, that the mysterious fluctuations which to-day exist 
in silver may not appear in gold to-morrow? 

To a limited extent it is admitted that gold may slowly un- 
dergo changes which in course of time may make a material 
difference in its value. Thus, Jevons, a standard authority 
in favor of gold, tells us that between 1789 and 1809 gold 
fell forty-six per cent, in value, and from 1809 to 1849 
gold rose one hundred and forty-five per cent. The last 
named change made a loan borrowed in 1809 and repaid in 
1849 cost the debtor, besides the interest, nearly two and a 
half times the value of the original sum. 

Thus we see that, by one of their own authorities and 
partisans, it is conceded that within the period of forty 
years the metal which is constantly spoken of as having a 
fixed value remained nominally at par, but actually rose in 



777^ ROOT OF THE MATTER. 221 

value in the ratio of lOO to 245. Furthermore, Jevons tells 
us that in a few years after 1849 gol^ ^^11 20 per cent, in 
value, and that it fluctuates from 10 to 25 per cent, in value 
during every panic. 

The foregoing sketch of the various reasons advanced for 
demonetizing silver brings us down to the ultimate point, 
the decision of which must conclude the controversy either 
in favor of gold alone or in favor of both gold and silver. 

THE ESSENTIAL ALLEGATION IN FAVOR OF GOLD. 

Omitting, as unworthy of debate, the superstition that 
gold constitutes the only real wealth and has a supernatural 
influence on sellers of goods, the claim in behalf of making 
it the sole legal tender is in reality narrowed down to this 
proposition : " Gold has a fixed value over which legislation 
has no influence. Gold is endowed with mysterious quali- 
ties which exempt it from the natural laws whose influence 
is constantly raising and lowering the value of all other 
things." In the language of David A. Wells, a prominent 
writer in favor of a gold currency, " the gold dollar is the 
dollar that is always at par." 

There are a few persohs in favor of gold as the only legal 
tender who concede that changes occur in the value of 
gold, computed through long periods, and in exceptional 
times. But even these individuals mostly fail to recognize 
that the natural laws which produce changes in value are 
constant and universal. Moreover, the aforesaid admitted 
changes in the value of gold are inconvenient facts which 
those in favor of " honesty and honest money " carefully 
conceal from public knowledge. On the contrary, it is virt- 
ually assumed by the majority of bankers, legislators and 
public writers, especially so by the religious press, that gold 
is exempt from the constant fluctuations in value which 
natural laws create in all other things. The demonetization 
of silver is demanded on the ground that it " fluctuates in 
value," while gold has an " unvarying value." 

Shall we examine this dogma or blindly accept it as 
true ? 



222 SOCIAL STRUGGLES. 

HAS GOLD A FIXED VALUE? 

We have now arrived at the most important question in 
the whole range of the problems of political economy under 
debate, to wit : Are the aforesaid allegations, on which 
those in favor of demonetizing silver rest their case, true ? 
If they be, then it inevitably follows that silver should be 
discarded, and there is no propriety in using it even for 
small change. But if these fundamental propositions be 
false, then the whole system which rests upon an assump- 
tion of their truth must be false also. 

Strange as it may seem, to this central point the vast ma- 
jority, both of the public and of writers, have paid no atten- 
tion whatever. But the financial policy of nations, the rel- 
ative value of a vast amount of property, and the welfare of 
many millions of people are all materially affected, either for 
good or for evil, by its decision. 

Let us now dissect the aforesaid assumptions and try to 
discover what really are the fundamental facts and principles 
which underlie this whole subject. We can then reason 
from facts and build upon a good foundation. 

THE BULLION REPORT. 

In examining any subject or thing, the proper course is 
to take advantage of the labors of predecessors. Therefore 
the first question before us is this : What method of inves- 
tigation has been pursued by those who have concluded 
that gold has a fixed value; that silver, prior to 1872, had 
also a fixed value, but since that time has both depreciated 
and fluctuated ? 

For ten years immediately succeeding 1808, England was 
the theater of an extended debate in regard to her currency. 
In January, 1810, Parliament appointed a committee to in- 
quire into the permanence of the value of gold and silver. 
This committee produced the famous Bullion Report which 
was published in August, 18 10, and debated in Parliament 
for several years thereafter. From the date of the publi- 
cation of this report to the present time, nothing has been 



ESSENCE OF THE BULLION REPORT. 



223 



written which has been considered by the advocates of me- 
talHc currency so high and conclusive an authority as that 
document. It is therefore presumptively a condensed 
statement of the best arguments which can be made to show 
that gold and silver have an invariable value. 

The essence of this report, and of the speeches in sup- 
port of it, consists of this proposition : 

" A pound of coined gold is always worth a pound of gold bullion of 
the same fineness. A pound of coined silver is always worth a pound of 
silver bullion of the same fineness. Therefore gold and silver coins 
have an invariable and determinate value. But it is to the interest of 
England to adopt gold as the sole legal tender, except for small change." 

The reader will note that the aforesaid argument is ap- 
plied to both gold and silver. But, during the past ten 
years, those who insist on the " fixed value " of gold, while 
continuing to regard the Bullion Report as the essence of 
wisdom, have nevertheless dropped out the word "silver" 
as forming no part of it, thus ignoring the fact that every 
argument of the Report in favor of gold is also made in 
favor of silver. At present, the central point of all argu- 
ments for making gold the sole legal tender is this : " A 
pound of gold coins is of the same value as a pound of gold 
bullion of the same fineness ; therefore gold has a fixed 
value." 

England endorsed the Bullion Report as the height of 
financial science. She enacted that after 18 16 gold, except 
for small change, should be the sole legal-tender metal. 

Said Report and the action taken thereon have been con- 
tinually cited as a sufficient argument and example to in- 
duce us to imitate the policy of England. 

But when we apply the same common-sense principles to 
this matter that we do to all other things, we discover that 
the aforesaid profound argument in favor of the stability 
of the value of gold is a mere quibble. The same process 
of reasoning would prove that everything whatsoever has a 
fixed value. 



224. ' SOCIAL STRUGGLES. 



FACTS WHICH OVERTHROW THE COMMON THEORY IN 
REGARD TO GOLD, 

At the same time and place, one thing is always worth 
precisely as much as another thing exactly like it. At the 
same time and place, one gold dollar is worth another gold 
dollar, one silver dollar is worth another silver dollar, one 
cabbage is worth another cabbage of the same size and 
quality, and one pig is worth as much as another pig which 
is precisely like it. So long as our comparisons of value 
are restricted to comparing one thing with the value of a 
precisely similar thing, we shall never find any changes in 
the value of the things thus compared. 

This must necessarily be so, for in such case we have, in 
fact, made no comparison or investigation whatever. We 
have virtually compared a thing with itself. It is as absurd 
as if a man on being sent to measure the length of a stick 
of timber should report that it was " as long as a stick of 
timber." As long as what stick of timber? " Why, it is 
just as long as itself." 

ORIGIN OF A BELIEF IN THE FIXED VALUE OF GOLD. 

The inquiry naturally arises: What has made it possible 
for large numbers of otherwise intelligent men to adopt 
such an absurd mode of comparing values as that aforesaid ? 
With equal pertinency the same question could be asked 
in regard to nearly every department of human knowledge. 

A physician or surgeon who should now treat patients 
precisely as they were treated by the most distinguished 
and able medical men of a hundred years ago would soon 
find himself in prison for malpractice and manslaughter. 
And we have every reason to suppose those gentlemen 
were just as conscientious as the practitioners of to-day. 

We now wonder at the superstition of the few ignorant 
persons who believe in witchcraft. But it is only about 
two hundred years since a belief in witchcraft was almost 
universal among the most intelligent people. Within that 
time, the President of Harvard College and other persons 



SLOW GRO WTH OF KNO WLEDGE. 225 

in similar high positions sanctioned the hanging of women 
and other persons accused of deahng with evil spirits. 

Within the lifetime of living men, the possibility of a 
locomotive and a steam-boat was denied by all the so- 
called scientific men in the world. 

Compared with the total length of human history, it is 
but yesterday since it was universally believed that the 
earth stood still and the sun moved round it. Assuming 
that this fundamental idea was correct, for thousands of 
years all the learned astronomers and " scientists " of the 
world were at work trying to explain the various phenom- 
ena of the heavens. But notwithstanding the fact that 
these learned gentlemen had the wisdom of " conservatism," 
and were not guilty of any " eccentricity " in conducting 
their investigations, their treatises were similar to much of 
what to-day is called " political economy." The " science " 
of astronomy was formerly obscure, pretentious, and con- 
tinually contradicted by facts. In truth, it was not a 
science. No sooner was a new theory of the heavens con- 
structed than some inharmonious fact would appear, and 
then th6 complex theory would have to be adjusted on 
another hypothesis. At length, the idea of inquiring into 
the truth of what had so long been assumed as true occurred 
to Copernicus. 

Amazed at the wonderful results which flowed from 
starting with the idea that the earth revolved and the sun 
stood still, he spent the greater portion of his life in con- 
sideration, before publishing what was deemed such a 
" crazy theory." In 1543 Copernicus published the results 
of his prolonged studies. They were almost universally 
pronounced by the "scientists " of that day as the work of 
a visionary. 

In 1616, Galileo, the pupil of Copernicus, was tried for 
the offense of teaching the heresy that the sun stood still, 
and if he had not recanted, would probably have been 
tied to a post and roasted as '*an agitator." It was as- 
sumed that Galileo was wrong, simply because all the so- 
15 



226 SOCIAL STRUGGLES, 

called scientific authorities for ages had said that the earth 
stood still. 

A short time ago, a colored preacher in Virginia, by the 
name of Jasper, created a sensation throughout the country 
by preaching sermons in which he asserted that " De sun do 
move." Mr. Jasper thought his statements proved by 
citing the undoubted facts that the sun does appear to 
move, and that all the wisdom of the world until lately said 
that the earth stood still and the sun moved. 

In all departments of knowledge, it has been gradually 
demonstrated that a belief is not necessarily true simply 
because it has been deemed so for a long time by a great 
number of persons. 

The world has slowly learned that Copernicus and Ga- 
lileo were right ; we now smile at the ignorance of Jasper, 
but we should remember that the Rev. Mr. Jasper uses the 
same form of reasoning and logic to show that the earth 
stands still that is commonly used to show that gold stands 
still. So long as we measure and compare the earth only 
with itself, it certainly does appear to stand still, and the 
sun to move through the heavens. The truth can only be 
reached by comparing the earth with other planets besides 
itself. 

BY COMPARISON WITH THINGS OTHER THAN ITSELF IS THE 
ONLY WAY IN WHICH WE CAN ASCERTAIN AND STATE 
ANY OF THE QUALITIES OF ANY OBJECT OR THING. 

When we wish to ascertain or state the color of an object, 
we do not compare its color with its own color. We com- 
pare it with the colors of the rainbow. When we wish to 
determine the weight of a ham, we do not put a similar 
ham in the other side of the scales. We learn its weight 
by comparing it with a pound weight. When we wish to 
determine the form of an object, we do not compare it with 
itself. We corhpare it with geometric lines and figures. 
When we wish to determine the value of a pig, we do not 
simply compare it with the value of another precisely sim- 



J 



BOW WE LEA UN VALUES. 



227 



ilar pig. We compare it with the value of a dollar, or 
something else. 

Thus we say : This pig is worth five dollars ; meaning 
thereby to state our opinion that the pig is worth five 
times as much as one dollar. Or, in like manner, we may 
compare the pig with some other animal or thing. 

In fact, with the exception of gold and silver, it has long 
been a universally recognized principle that the only proper 
way to ascertain any of the qualities of anything whatso- 
ever is to compare it, not with itself, but with some other 
object or thing. 

But, singularly enough, the vast majority of mankind 
have failed to see the plain fact that those metals are 
governed by the same natural laws, and therefore should be 
submitted to the same methods we employ in testing the 
various qualities of all other things. Within the past fif- 
teen years, this ancient custom has been modified. Silver 
is not now tested by comparing its value with that of itself. 
But the value of gold is still estimated by the old way of 
comparing gold with gold. 

ALL IDEAS ARE RELATIVE. 

, Experience and reason have taught us that all ideas 
respecting the qualities of everything are relative. When 
we say that a certain thing is long or short, heavy or light, 
hard or soft, or that it has any other quality, the statement 
always involves a comparison of that thing with something 
else. Very solid butter is often called " as hard as a stone." 
When butter is quite soft, we do not say : " As soft as 
butter," but the expression is often used : "This butter is 
as soft as lard." Cheese is sometimes said to be " as soft 
and rich as butter," and, in a similar manner, we compare 
the qualities of one thing, not with the qualities of the 
same thing, but with those of some other thing. When a 
surgeon examines an arm supposed to be broken, he com- 
pares the injured arm with the sound one. When we wish 
to know whether a column of mercury is rising or falling 
we do not compare it with another similar column of mer- 



228 SOCIAL STRUGGLE^. 

cury. We compare it with the glass tube which contains 
it. If our thermometers had two tubes alongside of each 
other, and if the mercury in one tube were simply compared 
with the mercury in the other, we should then find mer- 
cury, like Mr. Wells' gold dollar, "always at par." For at 
all seasons, the apparent height of a column of mercury, 
tested as aforesaid, would be unchanged. 

NEED OF COMPARING ONE THING WITH SOMETHING 
BESIDE ITSELF. 

If we get in a boat floating on a tide-water stream, it is 
impossible to tell whether we are going out or coming in, 
or in fact, whether we are in motion or remaining in one 
spot, so long as our eyes are kept fixed upon the boat. 
The facts of the case must be learned by comparing the 
boat with something besides itself. We must look at the 
bottom of the stream, at the shore, or at some other object 
besides the one we are resting on and moving with. For a 
similar reason, it is often difficult to tell whether the boat you 
are on is in motion or the boat alongside of you. Persons 
in railroad cars at depots are often puzzled to know 
whether their train has started or not. They see a train 
alongside of them in apparent motion, and, unless they see 
the ground or buildings, the jarring of their own car is the 
only way of deciding whether they have started or are 
being passed by a train going in an opposite direction. 
This arises from not being certain that they are comparing 
their own train with a fixed object ; with something besides 
itself. 

No one can deny that as long as we measure the length, 
weight or size of a given thing by a precisely similar' thing, 
it will always appear unchanged. For example, a man has 
an iron rod one hundred feet long, and he wishes to learn 
whether its length varies at lOO"' from its length at zero. 
If he measure it by a precisely similar rod, exposed to the 
same temperature, it will appear unchanged and unchange- 
able. But the moment he measures it by other things, he 
discovers a material change. 



LOGICAL AND ABSURD CONCLUSIONS. 



229 



This demonstrates that measuring one thing by compar- 
ing it with something precisely like it is not, in reality, a 
measurement at all, because no new facts are learned by 
such a proceeding. 

VALUE SHOULD BE TESTED AS ALL OTHER THINGS ARE. 

No valid reason can be given showing that what is called 
" value'" should not be scrutinized by the same methods 
of examination which experience has taught us are the 
only reliable means of ascertaining and testing other attri- 
butes. All other qualities of any given thing are learned 
by testing and comparing them with the qualities of some 
other thing. Hence we must conclude that the common 
mode of ascertaining the value of gold by simply compar- 
ing it with itself, is delusive. 

We are told that gold is always at " par." We ask : Par 
with what? The answer must be: Par with gold; for it 
must always be at par when compared only Avith itself. 

If an advocate of the idea that gold has a fixed value be 
asked to state the evidence that gold is always at par, he 
will tell you that it is proved by the fact that a piece of 
gold bullion one thousand times as large as one gold dollar 
is always worth one thousand gold dollars. 

Under free coinage this must be so. It is also true that, 
with free coinage, a bar of silver bullion one thousand 
times as large as a silver dollar is always worth one thou- 
sand silver dollars. If we coined two-ounce dollars out of 
copper, without charge for coinage, we should find that un- 
der all circumstances two thousand ounces of copper bullion 
were always worth one thousand dollars, so long as we 
stated the value of the copper bullion in copper dollars. 

The word " par " means of equal value. One thing at 
the same time and place is always on an equality of value 
with a precisely similar thing. Therefore one thing at the 
same time and place is always of the same value ; i. e., "al- 
ways at par " with a similar thing. If we test the value of 
potatoes in this way, we shall find potatoes " always at par." 



230 



SOCIAL STRUGGLES. 



This would be so, because one bushel of potatoes would be 
worth exactly another bushel, at the same time and place. 

The mint price of 25 8-10 grains of standard gold is one, 
dollar, paid in gold ; therefore a gold dollar is always the 
price of 25 8-10 grains of standard gold. Suppose the mint 
price of one hundred grains of copper were one dollar, paid in 
a copper dollar of one hundred grains. Then a copper dol- 
lar would always be the price of one hundred grains of cop- 
per, and the price of copper, measured in these copper dol- 
lars, would always be the same ; just as the price of a gold 
dollar is always a gold dollar. In 1859 gol^i compared 
with gold was at par ; compared with the silver dollar of 
412^2 grains it was about 95. Compared with itself, gold 
is now at par just as it was in 1859, but compared with the 
bullion value of the silver dollar, gold isnowabout 125. In 
1859 silver compared with itself was at par ; it now stands at 
the same point as it did in 1859, provided we still com- 
pare it with a silver dollar. No matter of what materials 
dollars are made, nor how many, nor how few in number, 
they will always be at " par " so long as compared only 
with themselves. 

But, as we shall hereafter see, this fact affords no infor- 
mation whatever in regard to the actual value of those dol- 
lars ; that is, their value tested as we do the value of all 
other things. 

LOGICAL RESULTS OF COMPARING GOLD ONLY WITH 

GOLD. 

Let us see to what absurd conclusions we are driven 
whenever we adopt the so-called "scientific" method of 
testing the value of gold, and follow it to its logical and in- 
evitable conclusions. So long as we use no other test of 
value but to estimate the value of 23 22-100 grains of pure 
gold at one dollar, and the value of one dollar at 23 22-100 
grains of pure gold, neither the amount of gold in the 
world, nor the greater or less demand for it for coinage, or 
any other purpose whatever, can have any effect on the 



TRUE TEST OF VALUE. 23 1 

value of gold. It would always be worth itself, and there- 
fore " always at par." 

If mines were discovered which yielded a thousand mill- 
ion dollars' worth of gold bullion annually, gold would not 
fall below "par," simply because "par" means nothing 
more nor less than that 23 22-100 grains of pure gold is one 
dollar ; and one dollar is 23 22-100 grains of pure gold. 

If the value of gold be not changed by increased supply, 
then the discovery of a solid mountain of gold would not 
affect its value ; if we measured gold bullion only with 
gold dollars it would surely remain at par. On the other 
hand, if all the silver in the world were destroyed, so that 
the demand for gold was three times as great as at present, 
gold would not rise in value,— it would remain at par. 
Even if all the silver and three-quarters of the gold were 
destroyed, still there would be no advance in the price of 
gold. Moreover, we might follow out this process until the 
amount of gold in the world was reduced to 23 22-100 
grains. We should then find this solitary dollar still only 
at par, because, measured only by itself, it would have the 
same value under all circumstances ; /. e., it would be worth 
as much as itself, neither more nor less. 

RESULT OF UNLIMITED COINAGE OF SILVER. 

Suppose we place the coinage of silver on the same basis 
that the coinage of gold now is, and thus restore silver to 
the position it had up to 1873. We should then find silver 
dollars at par with silver bullion, and silver bullion at par 
with silver dollars. 

This would be so for precisely the same reason that gold 
bullion is now at par with gold dollars. If a man own 
23,220 grains of pure gold, and, without expense to himself, 
can have them coined into a thousand gold dollars, he 
knows that the bullion is equal in value to a thousand gold 
dollars ; and he also knows that the dollars are worth as 
much as the bullion. 

But is the foregoing fact any test of the real value of 
gold.? We have simply divided a lump of bullion into one 



232 



SOCIAL STRUGGLES. 



thousand equal parts, and then found that one of those 
parts was worth one thousandth part of the whole lump. 
We can do the same thing with silver, or any other divis- 
ible substance or thing, and always arrive at the same re- 
sult. We can divide a bushel of wheat into thirty-two 
quarts. We shall then find each quart worth just as much 
as another quart, and the thirty-two quarts put together 
again worth just as much as a bushel. But this process 
does not determine the value, either of a quart, or of a 
bushel of wheat. It is simply childish folly, but essentially 
the same process by which the " unvarying value of a gold 
dollar" is arrived at. 

We do not need to be told that one quart of wheat at 
the same time and place is worth just as much as another 
quart of wheat of the same quality. When we desire to 
know the value of wheat, we want its relative value stated ; 
i. e., its value stated in some other commodity or thing be- 
sides wheat. 

CORRECT MODE OF STATING THE VALUE OF GOLD AND 

SILVER. 

The only rational way to test the value of gold and silver 
is to treat them just as we do everything else ; i. e., compare 
their value with the value of other things, — state their rela- 
tive value. 

When the value of gold is under consideration, the 
proper question is one which compares it, not with one, but 
with a number of other valuable things. What are the 
market prices, paid in gold, of wheat, cotton, wool, iron, 
hemp, corn, pork, beef, sugar, hardware, clothing and labor? 
In other words, what is the relative value of gold compared 
with the value of the various articles of commerce ? Com- 
parison with two or three of those articles might be mislead- 
ing, because they might be exceptionally plenty or scarce. 
But a comparison of the value of gold bullion with the 
value of a large number of other valuable things tells us at 
once whether gold bullion has risen or fallen in value, and, 
if so, to what extent. In like manner, a comparison of the 



THE KEY TO A PROBLEM. 23^ 

value of silver bullion with the value of a large number of 
other valuable things tells us, with unfailing certainty, 
whether silver bullion has risen or fallen in value, and, if 
so, to what extent. By this means, the relative value of 
gold or silver can be determined. When that is done, we 
have in hand a key which will unlock the problems which 
bewilder those who follow round and round the narrow 
track made by comparing one thing with a precisely similar 
thing. 

This true method of testing value is called " a general 
pricing of commodities." 

WHAT A PRICE IS. 

When we put a "price" upon a thing, we thereby state 
our opinion of its relative value compared ivitJi the thing in 
which zve state the price. In other words, two things are 
compared with each other and the ''price " is expressed as 
the result of the comparison. For example, in a commu- 
nity where eggs are used as money, a farmer takes a basket 
of eggs to the village and inquires the price per pound of a 
certain kind of sugar. He is told, " Half a dozen eggs." 
This is equivalent to saying that the price of eggs is two 
pounds of sugar, per dozen. When the trade is completed, 
the farmer has bought sugar and the grocer has bought 
eggs. The value of each one of the traded commodities is 
stated by comparing it with the other. The process is the 
same as if the price of the sugar were stated at eight cents 
a pound, and the price of the eggs at sixteen cents a dozen. 

When a grocer exchanges two dollars w^ith a farmer for 
ten dozen eggs, we ordinarily say that the grocer has 
bought, and the farmer sold eggs. But in fact the grocer 
has sold Ids money just as truly as the farmer has sold his 
eggs. And the farmer has bought two dollars just as cer- 
tainly as the grocer has bought ten dozen eggs. While we 
commonly speak of the " prices " of commodities, by so do- 
ing we also virtually speak of the " price of money." 

This should be steadily remembered, as it is very impor- 
tant. 



234 



SOCIAL STRUGGLES. 



MONEY CHANGES IN PRICE LIKE OTHER THINGS. 



Money is higher priced, when a less amount of it will buy 
a given amount of the necessaries of life. Money has fallen 
in value, when a greater amount of it is required to buy a 
given amount of a considerable number of the leading arti- 
cles of commerce. 

A farmer takes a hundred bushels of wheat to market and 
sells them for fifty dollars. He has then bought fifty dol- 
lars and paid a price of one hundred bushels of wheat for 
them. If he had received one hundred dollars for his wheat, 
the "price " of each one of those dollars would have been 
just one half what it was. In the aforesaid case, the ques- 
tion arises : Did the dollars bring a high price, or did the 
wheat bring a low price ? So long as our field of observa- 
tion is confined to the facts of this one case we are unable 
to decide those questions. The only way to determine them 
is to test and compare the value of both wheat and dollars 
by comparing each and both of them with a number of 
other things. If the price of a considerable number of 
commodities, on the average, be relatively much higher 
than wheat at half a dollar a bushel, we know that special 
circumstances have lowered the value of wheat. But if we 
find that the prices of all other things, on an average, have 
sunk to the relative level of wheat, then we know that half 
a dollar a bushel for wheat means a rise in the value of 
dollars. 

HOW TO TEST THE PRICE OF MONEY. 

The average scale of the prices of a considerable number 
of leading commodities denotes the price of money. A uni- 
versal rise in the prices of all kinds of goods denotes a fall 
in the value of the dollars in which those prices are stated. 
Dollars are cheaper than previously. The evidence of this 
is the fact that they can be bought with a smaller amount 
of other valuable property or labor. 

A general lowering of the scale of the prices of commodi- 
ties and labor denotes a rise in the value of the dollars in 



COMMON SENSE. 



235 



which those prices are stated. Dollars are dearer than they 
were. The evidence of this is the fact that a larger amount 
of other property is required to buy a given number of dol- 
lars than before the change occurred. 

THE PRICE OF GOLD. 

Let us apply the foregoing facts and principles to deter- 
mining whether a gold dollar has a fixed value, or not. If 
it have an unvarying value, then it has an unvarying price, 
because a price is simply a short and handy way of stating 
our ideas of value. If gold dollars have an unvarying price, 
then they can always be bought with the same amount of 
other property. 

The fact however is, that on the average, whoever goes in 
the market to buy gold dollars in 1886 finds that their price 
is over twenty-five per cent, higher than in 1870. In other 
words, over twenty-five per cent, more of labor and of the 
various products of labor, on the average, must be given in 
1886 than in 1870 to buy a given number of gold dollars. 
The price of gold has risen. Instead of a fixed value it has 
an unstable value. 

Every man who works for wages, paid in gold or its equiv- 
alent, buys gold and pays for it with labor. 

Every man who produces any one of the various forms of 
wealth and sells it for a price paid in gold is a buyer of gold 
and pays for it, either directly or indirectly, with labor. 

Every man who is obliged to sell his house or his farm 
for gold, is a compulsory buyer of gold, and receives a 
smaller amount of it in exchange for his property than he 
would if gold had not risen in price. 

The owners of gold, and the owners of bonds, mortgages 
and other securities which are made payable in gold by mak- 
ing it, in effect, the sole legal tender, have a far greater abil- 
ity to control, or purchase all the other property in the coun- 
try, in consequence of this rise in the price of gold. Such a 
rise also gives them an advantage over laborers for wages, 
because the laborer must sell his work at a low price for 
gold at a high price. This increases the amount of tribute 



236 



SOCIAL STRUGGLES. 



which labor is compelled to pay to capital. Suppose a man 
hold a hundred thousand dollars' worth of bonds or mort- 
gages at an interest of six thousand dollars per year. Labor 
is then two dollars per day. A year's interest will then buy 
three thousand days' labor. 

If the price of gold rise so that wages fall to one dollar 
per day, the aforesaid capitalist would be able to buy six 
thousand days' labor with a year's interest. If the rate of 
interest fall to four per cent., he will still be able to buy a 
thousand days' labor more than he formerly could with his 
income. 

The rate of interest paid during recent years on Govern- 
ment bonds and called loans does not correctly indicate the 
rate of interest actually paid by the great mass of debtors. 
The great bulk of existing indebtedness throughout the na- 
tion consists of personal notes and mortgages on real estate. 
On many of these instruments, the rate of interest is the 
same as it was in 1873. In cases where a reduction in rate 
has been made, this reduction has not equaled the fall in 
the prices of labor and its products. 

CORRECT TEST OF THE RATE OF INTEREST. 

The real test whether interest is high or low is : How 
much labor does the man who borrows money have to ex- 
pend in order to pay the interest ? The four per cent. 
United States bonds are a heavier burden on the American 
tax-payer now than the six per cent, bonds were fifteen 
years ago, because wages have been reduced and our ex- 
ports sell for much lower prices in gold than they did then. 
The interest on loans in this State has been reduced from 
seven to six per cent., but in reality interest is higher in- 
stead of lower. It remains at this high rate because so viuch 
debt already exists. Were it not for the vast mass of 
debts from which debtors cannot immediately escape, 
interest would at once fall to more nearly its actual value, 
and the property of the country would cease its pres- 
ent rapid transfer from the debtor to the creditor class. 



HOW BURDENS ARE INCREASED. 2^7 

The debtors have been surprised by legislation in the in- 
terest of the creditors. 

One important fact in this connection is generally over- 
looked by those who have written about the present situa- 
tion of affairs. Those who pay interest can only do so 
permanently from their savings. A reduction of wages and 
prices often reduces the amount possible for a debtor to 
save far more than the fall of prices. Thus, if a farmer's 
products be reduced twenty-five per cent, in price, such a 
reduction may reduce his profits and savings fifty per cent. 

PUBLIC DEBTS AND TAXES. 

Every self-supporting person pays taxes, either directly 
or indirectly, on everything he uses or consumes. Men who 
pay large tax bills do not, as a general rule, pay them from 
their own property, except upon and for such portion as 
they personally use or consume. For the residue, they are 
merely sub-collectors of taxes from their tenants, debtors and 
employees. 

We are burdened with large national, State, county and 
city debts. The interest and principal of these debts are 
paid by the tax-payers. The rise which has occurred in the 
value of gold has added to the burden of this debt because 
it takes more labor to pay it than when it was contracted, 
and this has caused increased taxation upon every consum- 
er. These additional taxes have been levied upon laborers 
in form of a reduction of wages ; the laborer's taxes are 
thus collected every time a week's or a month's wages are 
paid him. Our railroad corporations owe enormous debts. 
The interest and principal of these debts are paid from 
freight and fare. As railroad charges are, in effect, a tax 
upon everything transported by those roads, every self-sup- 
porting person thus indirectly pays a tax upon whatever he 
uses which is carried by rail. 

AN EXAMPLE OF BENEVOLENCE. 

The aforesaid facts explain the yearly occurrence in this 
country of a remarkable example of unselfishness and piety. 



238 



SOCIAL STRUGGLES. 



A considerable number of persons travel in the aggregate 
thousands of miles, at their own expense, and organize into 
what is called a "Bankers' Convention." The persons 
composing these conventions largely represent the capital- 
ists and money-lenders of the nation. They never exhibit 
the slightest desire to promote the selfish interests of their 
own class. But, on the contrary, they always express a 
great solicitude that " the laboring man " should be well 
taken care of. To this end they invariably point out the 
injustice of paying wages in anything but gold, or its 
equivalent in value ! 

THE TRUE EXPLANATION. 

By referring to the fundamental laws, heretofore stated, 
which govern the creation of value, we find a complete ex- 
planation of the recent rise in the value of gold. We have 
heretofore found that all values are the result of certain 
conditions and circumstances, and that therefore the value 
of a thing must necessarily change whenever a change oc- 
curs in the conditions and circumstances which created 
that value. 

WHAT HAS CHANGED THE VALUE OF GOLD. 

Since 1872, four important changes have taken place in 
the conditions under which gold is placed. First. An in- 
creased demand for gold to fill the place previously occu- 
pied by paper money and by silver coins, in several na- 
tions. 

Second. An increased demand for gold, caused by a ma- 
terial falling off in the yearly production of gold mines. 

Third. An increased demand for gold, caused by a large 
increase in the amount of gold consumed in the arts. It 
has been generally proclaimed, as a sound principle of polit- 
ical economy, that a rise in the value of a precious metal 
diminishes its use in the arts. But, during the past ten 
years, this doctrine has been shown false by the fact that, 
right in the face of a steady rise in the price of gold, the de- 
mands of art for gold have been greater both in variety and 



WHY PRODUCE HAS FALLEN LN PRLCE. 230 

amount than ever before. Two facts have produced this 
result: 1st. The increased application of scientific princi- 
ples and new inventions to arts and processes in which 
gold is employed ; 2d. The steady increase in the wealth of 
those who desire to display their riches by adorning their 
persons and houses with works of art of which gold forms a 
component part. 

Fourth. The fact that during the past twelve years large 
amounts of gold have been hoarded by nations, banks and 
individuals. The large amount hoarded in the United 
States since 1875 has been largely drawn from Europe. 
By diminishing the amount of gold in Europe, this process 
has raised its price on that continent. Consequently, the 
gold we have bought in England and other European na- 
tions has cost us a much higher price than it would if the 
United States had not adopted a policy which inevitably 
increased the demand for gold. 

AMERICA BEARING DOWN THE PRICES OF AMERICAN 

GOODS. 

The result of this policy has been low prices for our cotton, 
wheat, cheese and other products, and high prices for gold. 
The American nation has thus been acting the part of a 
bear on the prices of the commodities which American 
citizens sent abroad for sale. Every dollar of debt held by 
foreigners against us, which has been canceled since 1873, 
has cost the people of this country a much larger amount 
of goods than it would if we had not adopted the policy of 
raising the price of foreigners' gold, and thus enhancing the 
value of the securities paid them in gold. 

EFFECT OF LOWERING PRICES IN ENGLAND. 

Taking gold from England depressed wages and the 
prices of manufactured goods in that country. This en- 
abled English shippers to lower the prices of the goods ex- 
ported to this country. In order to compete in price with 
the imported goods, American manufacturers have been 
obliged to lower the prices of their wares. This has neces- 



240 SOCIAL STRUGGLES. 

sitated a reduction of the wages of factory operatives. 
Lower wages have diminished the abihty of the operatives 
to purchase the amount and variety of things formerly used 
by themselves and families. This has resulted in first lessen- 
ing the amount of retail, and next in reducing the amount 
of wholesale trade. A diminished sale for stocks of goods 
on hand has lessened the ability of merchants to pay their 
debts. This is frequently followed by bankruptcy and loss 
to those who have trusted the merchants. Thus the circle 
has spread from class to class, and person to person, until 
what are called " hard times " generally prevail. 

THE DELUSION THAT GOLD PRICES WOULD NOT FALL. 

When Germany demonetized silver, the belief in the 
" fixed value " of gold was so general that the great major- 
ity supposed prices stated in gold alone would be the same 
as when stated in both gold and silver. This certainly 
would have been so, if gold had possessed the " fixed value " 
that was ascribed to it. But, in fact, prices began to fall as 
soon as silver was disused, and this fall in prices extended 
from one thing to another, and finally extended from nation 
to nation. 

Meantime it has been declared that " gold has remained 
at par." How has it come to pass that so many people 
have been deceived by this trick of the " par value of 
gold " ? 

In a nation with gold as the sole legal tender, a price is 
fixed bylaw on one commodity, and all other things have no 
price but the market price. Thus, in this country, the law 
fixes the price of gold bullion at one dollar for 23 22-100 
grains of pure gold, and this price is subject to no change 
whatever. This proceeding causes the term " gold dollar " 
to mean 2.'' fixed thingr But it by no means confers a 
fixed value on the thing designated as a dollar. It merely 
obscures the real value of gold, and causes it to appear sta- 
tionary while all other prices are in motion. Public atten- 
tion is thereby diverted from the essential fact, viz. : the 
average prices of all things bought and sold. 



RESUL T OF LEG IS LA TIOAI. 24 1 



EFFECT OF MAKING A METAL LEGAL TENDER. 

The attachment of a legal-tender price on a metal places 
it under conditions which render it difficult to determine 
how much of its value is dependent on the legal-tender law, 
and how much on other facts. We know that a portion of 
its value is derived from the legal-tender law, because that is 
one of several other conditions zvJiicJi create all its value. 
But what proportion of its total value is due to the condi- 
tions created by the legal-tender quality being affixed to it, 
can only be known by actual test. 

We know with absolute certainty that if several of the 
leading nations of the world were to demonetize gold, that 
the demand for that metal would be largely diminished and 
its value proportionally reduced. But exactly how great a 
reduction of the value of gold would thereby be occasioned, 
no one can predict with certainty. 

As heretofore seen, the practical operation of a legal-ten- 
der law is to mislead ordinary observers into supposing that 
the value of the legal-tender metal would be the same if no 
law existed ; that the law merely records a fact produced by 
other causes. But such a law also has a tendency to lead 
persons to suppose that the repeal of laws under which sil- 
ver is a fellow legal tender could have but little effect in 
raising the price of gold. 

Even so intelligent an observer as Prof. Jevons seems to 
have greatly underestimated the effect of legal-tender laws 
on the value of gold. 

In 1875 Prof. Jevons, in writing about the demonetization 
of silver, said : 

" Mr. Wolowski has earnestly warned Europe against the danger of 
abrogating the law of the double standard, and demonetizing silver. 
Germany, in adopting a gold standard, is causing a considerable demand 
for gold, and at the same time throwing many millions of silver coins 
upon the market. Austria, Denmark, Sweden and Norway are likely to 
follow her example. . If other countries were to insist upon suddenly 
having a gold money, it is evident that gold would tend to rise in value 
compared with silver, which might be largely depreciated. If France, 
Italy, Belgium and other countries now possessing theoretically the 
16 



242 SOCIAL STRUGGLES. 

double standard, were to allow the free action of their monetary laws, 
the depreciated silver would flow in and replace the appreciated gold, 
so that the change of values would be moderated. Mr. Wolowski as- 
serts that if this compensatory action be suspended, and the demonetiz- 
ation of silver be extended, there must ensue a disastrous rise in the 
value of gold, thus rendered the sole standard of value. All debts, pri- 
vate and public, will be legally due in this metal, and all burdens will be 
greatly increased. 

" Within the last year or two the predictions of M. Wolowski may seem 
to have been verified in some degree. The price of standard silver, 
which was at one time 62^ d. per ounce, has already fallen as low as 
57 3-4 d., while the demonetization of silver in Germany is only partially ac- 
complished. The whole effect of the great discoveries of gold was only to 
raise the price from about 59 3-4 d. to a maximum of 62J d., while the 
double standard system freely worked ; but since its action has been sus- 
pended, as we shall see, the minting operations of a single government 
can affect the price in a greater degree. 

" As regards the gold required to replace silver, it does not seem to be 
evident that there will be any scarcity. The adoption of the gold stand- 
ard does not necessarily involve the coining of much gold, for some 
countries may, like Norway, or Italy, or Scotland, have a principal currency 
almost entirely composed of paper. The current supply of gold from 
the mines is still very large, and we cannot be sure that it will not be in- 
creased by fresh discoveries. 

" In short, then, the amount of supply and amount of demand of both 
the precious metals depend upon a number of accidents, changes, or leg- 
islative decisions, which cannot, in any way, be predicted. The price of 
silver has fallen in consequence of the German currency reforms, but it 
is by no means certain that it will fall further than it has already done. 
That any great rise will really happen in the purchasing power of gold is 
wholly a matter of speculation. We cannot do more than make random 
guesses on the subject, and, as a mere guess, I should say that it is not 
likely to rise. Gold has, since 1851, been falling in value, and an in- 
creased demand for gold is not likely to do more than slacken, or at the 
most arrest the progress of depreciation." 

Events have shown that Prof. Jevons did not appre- 
ciate the tremendous effects of legislation on values. He 
thought the relative fall in the price of silver to 57 3-4 pence 
per ounce was the probable final measure of the rise of gold 
occasioned by the partial demonetization of silver. But at 
present (September, 1885) silver is quoted at 47 pence per 



THE TRADE DOLLAR. 24^ 

ounce in London."^ If the lamented professor could now 
write on the same subject, he would probably say that the 
predictions of M. Wolowski were rapidly being verified. 

We have recently made an experiment in this country 
which practically shows the effect produced by affixing 
a legal-tender quality to a coin, and then removing that 
quality. In 1873, Congress authorized the coinage of 420 
grains of standard silver into a " trade dollar." Although 
the legal-tender quality of this dollar up to 1876 was re- 
stricted to only five dollars, and sums under that amount, 
yet so great was the demand for them caused by the de- 
monetization of the dollar of 412^^ grains and an unlimited 
legal tender, that over fifteen millions of those dollars were 
coined in the years 1874, 1875, and 1876. On July 22, 
1876, Congress repudiated money of its own creation by 
enacting that the trade dollar should no longer have any 
legal-tender quality whatever. On February 28, 1878, 
Congress partially restored the silver dollar of 412^ grains 
to its original position. 

Thus two United States silver dollars now are, and for 
several years have been, in existence. One, a legal tender 
of 412^ grains, circulates as one dollar. The other, a coin 
bearing the United States certificate that it weighs 420 
grains, but not a legal tender, is sold for eighty cents when a 
buyer can be found at that price. f 

As an illustration of the absurd conclusions to which false 
economic theories may lead a person, it may be stated that 
our present Secretary of State recently argued that it would 
be '' dishonest " for the United States Government to itself 
receive a coin bearing its superscription, at the same price 
it was issued from the United States mints ! 

HAS SILVER DEPRECIATED IN VALUE? 

Having examined the truth of the common belief that 
gold has a fixed value, let us now investigate the al- 

* While this work is under revision, July 31, 1886, silver is quoted at 
^2d. per ounce. 

t Trade dollars ordered redeemed by Congress March 2, 1887. 



244 



SOCIAL STRUGGLES. 



leged recent depreciation and fluctuation in the value of 
silver. 

The following table, giving the price per ounce of silver 
bullion for the ten years preceding the demonetization of 
the silver dollar, has been furnished by the Director of the 
United States Mint : 





Price per 


Price per ounce 


Value of Silver bullion 




in United 


in the silver dollar of 


Year. 


ounce in 
London. 


States gold 
coin. 


412J grains in United 
States gold coin. 




Pence. 


Cents. 




1863 


61 3-8 


121.09 


104.06 cents. 


1864 


61 3-8 


1 2 1 . 09 


104.06 


1865 


61 1-16 


120.47 


103.52 " 


1866 


61 1-8 


120. 59 


103.63 


1867 


60 9-16 


119.48 


102.67 " 


1868 


60 1-2 


119.36 


102.57 


1869 


60 7-16 


119.24 


102.47 " 


1870 


60 9-16 


1 1 9. 48 


102.67 " 


1871 


60 1-2 


119.36 


102.57 « 


1872 


60 5-16 


118. 99 


102.25 " 


1873 


59 1-4 


116. 90 


100.46 " 



It will be seen from this table that the bullion in a silver 
dollar is of the same value as the bullion in a gold dollar 
when silver bullion is worth in London about 59 pence per 
ounce. Thus it appears that the demonetization of silver 
was bep'un when the bullion value of the silver dollar was 

o 

greater than the bullion value of a gold dollar. Since 1873, 
the relation of silver and gold has steadily changed. At 
present (September, 1885), an ounce of silver bullion can 
be bought in London for 47 pence stated in the value of 
gold bullion. This shows that the value of silver bullion, 
compared with the value of gold bullion, has depreciated 
about twenty per cent, since 1873. 

If we assume that gold has an invariable value, as is usu- 
ally done, we at once arrive at the conclusion that silver is 
about twenty per cent, less valuable now than in 1873. But, 
we have heretofore found that gold has not a fixed value. 
Moreover, we have found that gold, since 1870, has ad- 
vanced about twenty-five per cent, in value. Therefore, if 



NEED OF COMMON SENSE. 245 

we wish to learn the relative value of silver to-day, com- 
pared with its value in 1870, we must subject it to some 
other test than merely comparing it with gold. 

HOW TO TEST THE VALUE OF SILVER. 

The value of silver depends on precisely the same natural 
laws which give value to wheat, cotton, wool, gold, iron, 
steel, copper, lead and all other things which we term " val- 
uable." Therefore it follows that the value of silver bul- 
lion can only be correctly determined by testing its value 
in precisely the same way we do the value of other things. 
We have heretofore found that the only proper way to as- 
certain the value of a thing is by comparison with some- 
thing besides itself. Furthermore, we have found that this 
comparison is inadequate and worthless if made with only 
one other tiling, because special events may have either 
raised or lowered the value of that one thing. We have also 
found that a correct comparison of value could be made by 
comparing the value of the one thing under examination 
with the value of all other things, or a very considerable 
number of other things. 

Small portions of the ocean rise and fall in form of waves 
and tides. But the general level of the ocean, the great 
mass of water, is undisturbed by the influences which are 
constantly raising and lowering small portions of it. In 
like manner, sudden and great changes may occur in the 
value of a small portion of the valuable things in the 
world. But the great mass of values, like the body of the 
ocean, it is impossible to rapidly and materially elevate or 
depress. When we fancy that such a change has been sud- 
denly made in all the valuable things in the world, it is 
only because we have used a false and delusive standard 
and mode of measurement. 

Like all other material things which are bought and sold, 
silver possesses peculiar intrinsic qualities over which legis- 
lation and other conditions have no effect whatsoever. 
But value is neither an inherent intrinsic quality of silver 
nor of anything else. Value is an appraisal of the import- 



246 



SOCIAL STRUGGLES. 



ance of owning or using one thing, relative to the import- 
ance of owning or using the object of comparison, at a cer- 
tain time and place and under certain circumstances. A 
statement of such an appraisal, such a comparison, is a 
statement of value. 

Let us apply these indisputable principles to the question 
before us and test the value of silver bullion to-day, com- 
pared with its past value, just as we would test the value 
of iron, copper, lead, or anything else. 

How much of other property, on the average, can be 
bought with a thousand ounces of silver bullion now, as 
(pompared with what could have been bought when the 
bullion in a silver dollar was worth as much as the bullion 
in a gold dollar? In 1873 a thousand ounces of silver 
were worth, in London, 59,250 pence stated in gold coin. 
A thousand ounces of silver are now worth, in London,,^ 
47,000 pence stated in gold. Will 47,000 pence now buy as 
much property on the average in London as 59,250 pence 
would buy in 1873 ? The market quotations of London 
answer this question in the affirmative. 

In 1873 a thousand ounces of silver bullion were worth, 
in New York, $1 169 in United States gold coin. To-day, 
a thousand ounces of silver bullion can be bought in New 
York for about $9352. Will $9352 now buy as much prop- 
erty of all kinds on the average as $1169 would in 1873 ? The 
market quotations of New York answer : Yes, and more too. 

The New York Sun of September 25, 1885, contained 
the following editorial regarding the last annual statement 
of wholesale prices made by the London Economist. 

•' The Eco7iomist starts with the prices of leading articles of commerce 
in the London market for the six years preceding 1850, the year when 
the new supplies of gold began to produce their effect. Calling the 
average price for this period of each article 100, it denotes the relative 
price of that article at the beginning of each subsequent year by a num- 
ber which bears a corresponding relation to 100. Thus, if coffee sold at 
an average of 10 pence per pound from 1845 to 1850, and at 17.3 pence 
January i, 1875, its number would be 100 for the first period and 173 at 
the later date. The result of this method of computation is as follows : 



RELA TIVE PRICES. 



247 



1845-50 1875 



Coffee 

Sugar 

Tea 

Tobacco 

Wheat 

Butchers' meat. 

Cotton 

Raw silk 

Flax and hemp 

Wool 

Tallow 

Leather 

Copper 

Iron 

Lead , . . . 

Tin 

Cotton cloth. . . 



100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 
100 



Totals 1,700 2,155 1.924 1.782 I 



173 

68 

100 

256 

80 

137 
III 

115 

95 
145 
108 

153 
105 

138 
137 
118 
116 



151 
70 
141 
180 
88 
119 
no 

135 

78 
117 
102 
144 

81 

92 
1 12 
109 

95 



1 22 
60 
100 
161 
82 
146 
105 
130 

71 

120 

89 

144 

75 

79 

87 

1 10 

lOI 



100 

67 

89 

222 

84 

125 

102 

139 

75 

108 

103 

139 



134 
99 



82 

60 

76 

240 

n 
145 

89 
126 

68 
106 
I II 

139 
80 

78 

83 

114 

92 



106 

54 

92 

200 

73 

123 

92 

117 

76 

98 

113 

139 

71 

69 

70 

104 



1,766 [,685 1,571 



93 
37 
78 

228 
60 

122 

93 
89 

78 
92 

87 
144 
60 
75 
65 
90 
80 



" These figures show that, with the exception of tobacco, butchers' 
meat, and leather, every article mentioned in the table was lower at the 
beginning of the present j^ear than it was at the beginning of 1880, 
and that all, without exception, are very much lower than they were 
at the beginning of 1875. As to the astounding assertion that average 
prices are no lower now than before 1850, it is seen to be utterly un- 
true. Only tobacco, butchers' meat, and leather have numbers above 
100, while of the rest, coffee and cotton have 93, and sugar is down 
to 37. The totals of the numbers of the seventeen articles men- 
tioned is only 1571, whereas in 1845-50 it was 1700. That is to say, 
the average price of these seventeen articles at the beginning of this year 
was lower than it was in 1845-50 by the difference between 1700 and 
1 57 1. Or, to put it in another way, $1571 now will buy as much of the 
seventeen articles enumerated as $1700 would in 1845-50. The fall 
from 1875 to 1880 was from $2155 to $1924, and since then each year 
has seen a further decline. During the present year some articles — 
sugar, for example — have advanced, but wheat, cotton, and other great 
staples have gone on falling, and are to-day lower than they have been 
for forty years. 

" The fall in the price of silver has kept pace with that of other products. 
Prior to 1875 silver ruled steadily at about 60 pence sterling per ounce. 
To-day it is quoted at about 47 pence. According to the notation 
adopted by the Economist this is a fall from 100 to 79, which is no 
greater than the fall in tea, flax, copper and cotton cloth, and far less 
than that in sugar, wheat, copper, iron, and lead. Silver, therefore, as 
mere bullion, is still an equitable standard of valie, notwithstanding 



248 



SOCIAL STRUGGLES. 



its depreciation as compared with gold, since its purchasing power 
remains about as great as it ever was. 

" Measured by its power to purchase the necessaries of life, the value of 
gold is shown by our table to have increased and to be still increasing. 
Whether this proceeds from the growing scarcity of gold, as some say, 
or from the greater abundance of all other commodities, as insisted by 
others, is immaterial. The fact remains that, relatively to other things, 
gold is getting dearer and dearer, since it commands more and more of 
other things in exchange. The result is that, under the gold standard, 
every man who owes money or who sells goods has to give more, while 
the man to whom money is owed or who buys goods gets more, by the 
difference between looand 79, than he would under the silver standard.'' 

The following article is taken from the Chicago Tribune 
of August, 1885 : 



i3^ 



" The following table (see p. 249) shows the average prices of a num- 
ber of leading articles in this market for twelve years past, on a currency 
basis, and those of the present time. These figures are not the highest and 
lowest reached during the period named, but the table gives a fairer view 
of the nominal range in values from one year to another than would an 
attempt to record the minor fluctuations of the several markets. The 
prices are wholesale and generally for the standard grade, as No. 2 in 
grain, and cargo prices for common lumber. The table is compiled 
from the yearly averages given in The Tribune Amtual Review for 
each of the years named. 

" The figures are very suggestive in regard to the purchasing power of 
the dollar during most of the time that has elapsed since the great fire in 
Chicago. They show that with the exception of wheat, corn, and live 
stock, prices are now at the lowest point, and in those articles the pres- 
ent selling values have been more in favor of the buyer only in excep- 
tional seasons. The general average is 35 per cent, less in currency, and 
28 per cent, less in gold than that of the year succeeding the panic of 
1873, and 26 per cent, less than that of 188 1. If we should take the top 
prices of that year for comparison, the difference would be much greater." 

The facts, tabulated, show that debtors are being forced 
to pay debts in a manner not contemplated/ by the original 
contract ; and that an attempt is steadily made to conceal 
this rascality by clamoring about the " dishonest silver 
dollar." But this dishonest dollar has remained more 
valuable than the gold dollar was before cunning and arti- 
fice raised its value as a sly mode of oppression and wrong. 



RELATIVE PRICES. 



249 



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250 



SOCIAL STRUGGLES. 



Table A. 

Table showing the rise and fall in Prices of the principal Com- 
modities IN THE New York Market, taking the period of three 
years 1870-1872 as a basis, and the average price of silver each 
year. Compiled by E. O. Leech, Computer of Bullion. 



Articles. 



Average gold prices in New York. 



•S rt ° 



Flour : 

Superfine barrel . . 

Rye-flour barrel. . 

Corn-meal barrel. . 

Wheat: North'n. .bushel. . 

Rye bushel. . 

Oats bushel. . 

Corn bushel. . 

Coal : Anthracite .... ton . . 
Coffee : 

Rio pound. . 

Java pound. . 

Cotton: Upland. . pound. . 
Fish: 

Cod cwt. . 

Mackerel barrel. . 

Hops pound. . 

Iron : Scotch ton . . 

Lead: Pig cwt. 

Leather pound. 

Molasses : N. O. . .gallon. . 

Nails : Cut pound. . 

Naval stores : 

Turpentine gallon. . 

Rosin barrel . . 

Paint : Red-lead cwt . . 

Pork : 

Mess barrel. . 

Hams pound. . 

Lard pound. . 

Rice cwt. , 

Salt : Liverpool . . . .sack. , 
Sugar : 

Cuba pound. 

Loaf pound. 

Tallow : 

American pound . 

Wool: 

Common pound. 

Merino pound. 

Pulled pound. 

Average London price 
OF silver per ounce 

FINE 



4-579 

3-725 

1-397 

.867 

•495 

.712 

5.068 

•151 
.185 
. 176 

5-407 
15.968 

,247 

34-554 

5.702 

.270 

.603 

.041 

.476 
2.689 
8.158 

16.954 

. 120 

.105 

7.279 

2-133 

.077 
. 109 

.08: 

.263 

-550 
.426 



135 
616 



253 
934 
438 
547 
089 



2X6 
121 



200 
197 
489 

233 
212 

370 

037 

308 

397 
900 

143 
084 
065 

590 
690 

070 
086 

063 

254 
414 

349 



$4-439 
3-524 
3.070 
1.307 
1 .024 

.484 

.625 
4.216 

.116 
-173 
-"5 

5-449 
18.990 
.201 

24.44526 
4.858 

-234 
.467 

•037 



1.325 1.145 



J3CO 



.470 

2. 067 

6. 290 

17. 299 
.116 

. 120 
6. 200 

•750 

.077 
. 100 

. 070 

.290 
-454 



1.138 



247 
918 
277 
833 
575 
796 

335 

098 
160 
118 

574 
790 

458 
753 
960 

237 
587 
041 



.410 

-723 

.92 

.206 

-730 

-503 

.644 

-350 

. 104 
.177 
.103 



515 

"5 

6 .300 



17.040 

. 140 

.119 

5.900 

•750 

-073 
.099 

.083 

.306 

■455 
.386 



1.136 



6. 311 

17.520 
.562 

24 , 000 
4-340 
-23 
.529 

•039 

.428 
I. 623 
5.800 

16. 690 

-139 

. TOO 

6.400 

. 710 



.091 

.078 

.302 
.440 



$2,859 

2.694 

3-038 

I .016 

.691 

.368 

.616 

4.106 

. 109 
.165 
. 109 

5.267 

21-534 

■245 

21.618 

3.822 

-237 
.512 



1.110 



.324 
1-351 
5.700 

16.363 
-131 

• 043 

6. 100 

. 700 

•053 
-074 

.071 

• 265 
•409 
•339 



1.113 



205 
677 
040 
970 
709 
361 
528 
825 

093 
125 
082 

274 
419 

134 
630 

925 
221 

507 
022 

343 
137 
490 

645 
108 
068 
384 

732 

053 
069 

056 

343 
266 



1.064 



RELATIVE PRICES. 



251 



Table B. 



Articles. 



Flour ; 

Superfine barrel . 

Rye-flour barrel . 

Corn-meal barrel . 

Wheat : 

Northern bushel. 

Rye bushel . 

Oats bushel . 

Corn bushel . 

Coal : Anthracite .... ton . 
Coffee : 

Rio pound. 

Java pound. 

Cotton: Upland, .pound. 
Fish: 

Cod cwt. 

Mackerel barrel . 

Hops pound . 

Iron: Scotch ton. 

Lead : Pig cwt . 

Leather pound. 

Molasses : 

New Orleans. . ..gallon. 

Nails: Cut. ..... .pound. 

Naval stores : 

Turpentine gallon. 

Rosin . barrel. 

Paint : 

Red-lead cwt . 

Pork: 

Mess barrel 

Hams pound . 

Lard pound . 

Rice cwt. 

Salt : Liverpool .... sack . 
Sugar : 

Cuba pound. 

Loaf pound. 

Tallow : 

American pound . 

Wool : 

Common pound. 

Merino pound. 

Pulled pound. 

Averasre 



Comparison of prices of 1880 and subsequent years, with 
the average prices of 1870--1872, expressed in 1,000. 



1,000 
1,000 
1,000 

1,000 
1,000 
1,000 
1,000 
1,000 

1,000 
1,000 
1,000 

1,000 
1,000 
1,000 
1,000 
1,000 
1,000 

1,000 
1,000 

1,000 

1,000 

1,000 

1,000 
1,000 

I, 000 

I, 000 

1,000 

1,000 
1,000 

1,000 

1,000 
I, 000 
1,000 



819 
790 

753 

897 
1.077 
885 
768 
807 

847 



1, 109 

1,077 
798 
709 

742 
785 

614 
902 

647 
520 

96S 

S98 
700 
619 
905 



909 

789 

768 

966 

753 
819 

80 7 



880 
769 
824 

936 
1,181 
978 
878 
832 

768 

935 

653 

1,008 

1,1 

814 
707 
853 



789 
90 

987 
769 

771 

1,020 
967 

1,143 

852 
354 

1,000 
917 

854 

1,103 

825 
854 



709 
1,052 

914 
961 
1,162 
I, II 

855 

649 
865 
670 

1,216 

1,177 
1,874 

774 
870 
878 

973 
1,000 

1,08 
787 

77: 

1,005 
I, 167 

1,133 
811 

354 

948 
908 

1,012 

1,163 
827 
906, 



676 
813 

784 

863 

842 

1,016 

904 
858 

689 

957 

585 

I, 167 
1,097 

2,275 

695 
761 

859 

877 
951 

899 
604 

711 

984 
1,158 

952 
879 
333 

883 
835 

951 

1,148 
800 
894 



884I 951 1 qoo 



567 
588 
816 

727 
797 
743 
865 
810 

7 
8 
619 

974 
1,349 
992 
626 
670 
878 

849 
927 

681 

502 

699 

965 
I, 092 
790 
838 
328 

688 
679 

866 

1,008 

744 
796 

791I 



635 
803 
816 

694 
8i8 
729 

742 
755 

616 
676 
466 

790 
1,279 

543 
597 
688 
819 

841 
537 

721 

423 

^7Z 

687 
900 
648 
740 
343 

688 
633 

683 

1,304 

484 
700 

711 



252 SOCIAL STRUGGLES, 

From Table A it appears that in 1870- 1872 the average 
price of superfine wheat flour, stated in gold, was $5,046. 
It would follow that 100 barrels of such flour were then 
worth $504.60 in gold. At the same time, the average 
price of silver was $1,325 per ounce in gold. Therefore, 
380 and 83-100 ounces of silver in 1870- 1872 would buy 100 
barrels of superfine wheat flour. 

Table A also shows that in 1885 the average price of 
superfine wheat flour was $3,205 stated in gold. In that 
year loO barrels of such flour therefore cost $320.50 in gold. 
At the same time, the average price per ounce of silver was 
$1,064 in gold. Therefore 301 22-100 ounces of silver, in 
1885, would buy the same amount and quality of flour that 
380 83-100 ounces of silver would in 1870-1872. 

In other words, in 1885, lOO barrels of superfine wheat 
flour would buy 79 and 61-100 less ounces of silver than the 
same amount and quality of flour would buy in 1 870-1872. 
A few figures will show the reader that with the excep- 
tion of fish and common wool, articles subject to exceptional 
influences, a similar diminution as above found in case of 
wheat flour exists in the amount of silver which can be 
bought with a given amount of commodities in 1885 as 
compared with 1 870-1 872. It clearly appears that instead 
of being " depreciated," as alleged by its enemies, silver has 
actually risen in value since 1872. And, be it remembered, 
in 1872 the bullion value of a silver dollar was 2^ per cent, 
greater than the bullion value of a gold dollar. 

From Table B it appears that if the figures 1000 be as- 
sumed to represent the total average of prices stated in 
Table A, the figures 71 1 represent the total average prices of 
the same commodities in 1885. From Table A it appears 
that the ratio of decline in the price of silver bullion stated 
in gold, from 1870-1872 to 1885, is from $1325 to $1064. 
This is equal to about 19.7 per cent.; this percentage repre- 
senting the decline in the value of silver relative to gold for 
the time stated. 

From 1870-1872, commodities declined in value by 
gold figures 28.9 per cent. That is, 28.9 per cent, would 



WHAT THE WAR ON SILVER MEANS. 



253 



need to be subtracted from the average prices of 1870- 
1872 to produce the average prices of 1885. 

The foregoing figures show that the bulhon-purchasing 
power contained in a silver dollar in 1885 was about nine per 
cejtt. greater than the bullion-purchasing power contained in 
a gold dollar in 1870-1872. If we now had unlimited coin- 
age of silver dollars, each dollar would be worth, at least, 
the value of the bullion from which it was made. It follows 
that the " flood of debased money " of which we hear so 
much would be nothing more nor less than the coinage of 
dollars, each one of which would contain bullion of a greater 
value than a gold dollar had in 1870. 

The real nature of the " cheap money " cry can perhaps be 
shown by a dialogue between a farmer and a money-lender 
who has stated his aversion to cheap money. 

" Are you opposed to everything being cheap ? " 

" No. It is a great blessing to have cheap bread, meat, 
clothing, and in short to have everything cheap. I do not 
care how cheap all commodities become. But my property 
would be depreciated if I am paid off in ' cheap silver.' " 

" In that case the munbcr of your dollars would not be 
diminished ; and would not the fact that with these ' cheap ' 
dollars you could buy more property than with the dollars 
you loaned be conclusive evidence that their value was 
unimpaired ? The fact is, you want to have the value of 
land, labor and everything else put down, except the value 
of money. You want to curtail the production of dollars 
while the production of all things else goes on without 
limit. Do you not see that this is simply a mode of rob- 
bing the rest of the community for your benefit and others 
like you ? " 

ANOTHER COMPARISON OF PRICES. 

The following table, prepared by H. C. Burchard, late di- 
rector of the United States Mint, has been copied from an 
interesting and valuable pamphlet, " The American Dollar," 
by Judge R. M. Hughes : 



254 



SOCIAL STRUGGLES. 



Average and Comparative Prices of the Principal Domestic 
Commodities Exported from the United States from 
Declared Values at Time of Export, in Gold : 



Average price during fiscal years. 



commodities. 



Hogs head 

Mules " 

Sheep " 

Ashes, pot and pearl, pound 
Beer : 

In bottles dozen 

In casks gallon 

Barley . . bushel 

Bread and biscuit pound 

Indian corn bushel 

Indian corn meal barrel 

Oats bushel 

Rye " 

Rye flour barrel 

Wheat bushel 

Wheat flour barrel 

Brick M 

Candles pound 

Coal : 

Anthracite ton 

Bituminous " 

Copper, pig and bar. . .pound 
Cordage, rope, twine.. . " 
Cotton : 

Sea Island " 

Other " 

Colored yard 

Uncolored " 

Apples, dried pound 

Glue " 

Hay ton 

Hops pound 

Ice ton 

India-rubber boots, etc . .pair 
Iron : 

Pig pound 

Bar " 

Boiler plate " 

Railroad bars .... " 
Sheet, band, etc. . . " 

Car wheels piece 

Nails and spikes pound 

Steel ingots " 

Boots and shoes pair 



2.091 
•357 
•549 
.057 
.924 

5.001 
.629 

1 . 131 

5^514 

1 .2 

6. 112 

II . 112 

. 164 

4.710 
6.63 

• 174 
.205 

•537 
•235 
. 170 
. 162 
.094 
.251 

I7^423 
•153 

4.068 

3-245 

.016 
.050 
.046 
.036 
.054 
19.914 
.057 
.119 
1.519 



1.854 

•375 

.690 

.049 

.683 

2.670 

.506 

.764 

4.156 

1 .126 

5^955 

8.854 

.124 

4-747 

3 440 

•157 

. 109 

. 202 
. 107 

.077 
.083 

.077 

.181 

19.656 

.718 

2.599 

1.382 

.015 

• 034 
.036 
.032 
.049 
10.662 

•035 

.092 

1 .219 



Percentage of 
price of 1884 
to price of 
1870. 




896 
309 
556 
048 
611 
238 
398 
695 
136 
066 
588 
590 
126 

061 
705 
148 
096 

323 
105 
072 
075 
071 
164 
322 
242 

305 
208 

013 
030 



029 
047 
427 
033 

io6| 
201 



90 
86 

lOI 

84 
66 
64 

63 
61 

75 
82 

91 

68 



76.8 

64.9 
70.9 
85.0 
47.0 

60. 1 

44^7 
42.3 
46.3 
75^5 
653 
105.2 
158.2 
56.6 
37-2 

81.2 
60.0 



80.5 
87.0 
47-3 
57-9 
89.0 
79.0 



RELATIVE PRICES. 



255 



COMMODITIES. 



Lime and cement barrel 

Oil cake pound 

Mineral oil, crude gallon 

Naphthas, benzine, etc. " 

Illuminating oil " 

Lard oil " 

Neatsfoot oil " 

Sperm oil " 

Whale oil " 

Linseed oil " 

Gunpowder pound 

Bacon " 

Hams " 

Fresh beef " 

Salted beef " 

Butter " 

Cheese " 

Eggs dozen 

Fish : 

Dried cwt 

Pickled barrel 

Lard pound 

Pork pound 

Onions , bushel 

Potatoes " 

Quicksilver pound 

Rags 

Rice 

Salt bushel 

Cotton seed pound 

Soap 

Spermaceti " 

Spirits of Turpentine . .gallon 

Starch pound 

Sugar : 

Brown " 

Refined " 

Molasses gallon 

Tallow pound 

Tobacco, leaf " 

Varnish gallon 

Beeswax pound 

Boards, planks M feet 

Timber, sawed cubic feet 

Wool, raw pound 

Zinc, plates and bars . . " 

Average 



Average price during fiscal years 



$1,972 
.021 
.206 
. 104 
•305 

1-375 
1.295 

1.589 
.734 

1 .0 
.157 
.157 
.157 
.072 

.044 
•293 
•153 
•395 

5.187 

8.185 

,.165 

•133 
1.675 
.690 
.406 
.089 
.059 
.401 

.080 

•329 
.418 
.082 

. 112 
.125 
.300 

. lOI 

•ti3 

1-587 

•396 

20.732 

.171 

.096 



^1.608 
.013 
.074 
.076 
.087 

•931 
.892 
r.055 
.508 
.638 

•153 
. 109 
. 127 
. 102 
.089 
.185 
. 112 



5-571 
7.185 
.118 
.099 
•945 
•975 
•369 
.018 
.063 

•319 
.009 
.051 
.167 
.442 
.046 

.086 
.091 
.223 
.082 
.082 
1. 941 
.296 
16.788 

•153 
• 342 
.083 



$1,649 
.014 
.079 
.071 
.092 
.707 
.941 
-948 

•390 
.660 

•157 
. 102 
. 102 
.099 
.076 
.182 
.103 
. 212 

5.824 

6.593 
.095 
.079 
.859 
.675 

•344 
.019 
.060 

•392 
.012 
.049 
.187 

•344 
.045 

.073 
.071 
.152 
.076 
.091 
1.963 
.310 
17.063 
.112 
.296 
.076 



Percentage of 
price of 1884 
to price of 



66 
38 
68 

30 

51 

72 

59 

53 

62 

100 

64 

64 

137 

172 

62 

67 

53 

1X2 

80 

57 
59 
51 
97 
55 
21 

lOI 

97 



61 

56 
82 

54 

65 
57 
50 
75 
80 
123 
78 
82 

65 



79.2 



73-9 



256 



SOCIAL STRUGGLES. 



OUGHT AN EQUALITY TO BE MAINTAINED BETWEEN THE 
VALUE OF THE GOLD AND THE SILVER DOLLAR ? 

Some persons favor coinage of silver to the greatest ex- 
tent consistent with maintaining an equality between the 
silver and the gold dollar. Beyond that point they are not 
willing to go. 

A little reflection shows that such persons are ready to 
sacrifice the positive advantages of a currency of uniform 
value to the superstition that gold has an " unvarying value." 
The foregoing tables show conclusively that gold has risen 
largely in value. Suppose, in consequence of an increased 
use of gold in the arts, a diminution of the productiveness 
of gold mines, or from any other cause, gold should continue 
to rise. Instead of a rise of twenty-six per cent., suppose it 
should rise fifty or sixty per cent, and prices stated therein be 
correspondingly depressed. In such case, which is probable, 
shall we contract and limit the number of silver dollars in 
order to raise each one of them to whatever value gold may 
reach? But this absurd conclusion is precisely what the 
doctrine aforesaid inevitably brings us to, if we logically ad- 
here to it. 

The theory that we should make it a cardinal point to 
maintain an equality between the value of the gold dollar 
and the silver dollar is utterly false. It ignores the estab- 
lished principle that the only way to preserve uniformity in 
the value of dollars is to maintain uniformity in their rela- 
tive number, without reference to the materials of which 
those dollars are composed. 

STATEMENTS OF THE NEW YORK TRIBUNE. 
The New York Trihiine of January 8, 1885, says : 

"About the 13th of December, 1884, the market for products touched 
the lowest level of prices ever reached in this country since records of 
prices began. The range of prices is now below that of October, 1878, 
then the lowest reached for many years. When the depreciation of 
paper currency vanished in October, 1878, it was found that prices were 
more than 15 per cent, below the specie level of i860, the last preceding 
year in which prices had been made in gold." 



VA L WE OF SIL VER. 257 

In the summer of 1885, the New York Tribune contained 
another editorial, the essence of which was stated in the 
heading, ''Prices tzventy per cent, lozver than in i860 ." As 
the Tribune is an advocate of demonetizing silver, the 
significance of the above admission is apparent. A little 
reflection ought to have shown this editor that in these 
articles he refuted all that he had been constantly saying 
about the "depreciation of silver." For, by his own show- 
ing, the change in values arose almost entirely from stating 
prices in gold, enhanced in value, while prices stated in 
silver were little changed. 

SILVER MORE STABLE IN VALUE THAN GOLD. 

First. Its amount is greater. The total value of all the 
silver in the world is greater than the total value of all 
the gold in the world. The smaller the amount of any 
commodity, the more easily and readily it is affected by 
any influence which tends either to increase or diminish the 
demand for it. 

In 1828, the Russian Government, owning the principal 
platinum mines in the Ural Mountains, in view of the inde- 
structible qualities of platinum, commenced to coin it into 
money. But it was soon found that, owing to the small 
stock of platinum in existence, any increased demand for 
those coins caused a great increase in their value. Coin- 
age of platinum was soon abandoned in consequence. This 
experiment of Russia demonstrated what could have been 
foretold from reasoning ; viz., the value of the materials 
from which metallic money is made is raised or lowered by 
an increased or a diminished demand for them, just as an 
increase or a diminution of the temperature to which they 
are exposed raises or lowers the heat of different sized 
bodies of water. A few hours of warm sunshine will ma- 
terially raise the temperature of a small dish of water. 
Much less effect, by the same rays, will be produced on a 
barrel of water. On a deep lake, the effect would be inap- 
preciable. The same phenomena are produced by the ex- 
17 



258 



SOCIAL STRUGGLES. 



posure of different sized bodies to cold. The shallow water 
will freeze while the deep water remains open. 

The amount of gold being smallest, it is first, and to the 
greatest extent, affected in value by an increased demand 
for it. In the language of brokers, it is easily " cornered." 
Silver, being larger in amount and value than gold, is less 
readily affected by changes of conditions than gold. And 
when gold and silver are both used as full legal tenders 
with unlimited coinage, it is more difficult to either raise 
or lower their value than when one metal is used singly. 
The stock of metal on hand is then greater and there is 
more inertia to overcome. 

Second. Silver is owned and held by a m.uch greater 
number of persons than gold. This fact produces an effect 
similar to the superior stability in temperature of a large 
body of water. It is far more difficult for any new condi. 
tion or event to suddenly affect the value of what is held 
by six hundred millions of people than to affect something- 
held by two hundred millions. 

Third. Money, whose value is practically identical with 
the value of the materials from which it is made, is perfect 
just in proportion to the stability of the value of those 
materials. Said materials will remain stable in value just 
to the degree that the conditions surrounding them are 
stable ; that is, they must increase in amount when an in- 
creased demand arises for them and they must diminish in 
amount when a diminished demand occurs. Otherwise 
the altered demand will inevitably alter their value. This 
is one reason why money made of silver is less liable to 
fluctuate in value than money made of gold. Gold mining 
partakes more of chance and accident than silver mining. 
Silver ore can be more certainly and readily increased in 
amount by the application of additional machinery and 
labor than gold bullion can. In other words, silver mines 
are more in the nature of a permanent, regular industry, and 
consequently are more responsive to the stimulus of an in- 
creased demand for silver bullion than gold mines. Espe- 



STABLE PRICES AND STABLE MONEY. 



259 



cially is this comparison true when made with reference to 
gold placer mines. 

But it is obvious that neither one of said metals can be 
as fully controlled in amount as may be necessary in order 
to insure absolute stability in the value of the money made 
therefrom. 

Fourth. Its greater bulk and weight make it more dif- 
ficult to hoard silver than to hoard gold. It is not the 
amount of money in a country which affects prices so much' 
as the amount of money in actual circulation. Hence a 
combination of capitalists, by hoarding a large amount of 
money, can depress prices at pleasure. It is more unlikely 
that a country with a silver currency should be suddenly 
drained of a large portion of its coin, as the combined re- 
sult of exportation and the hoarding which often accom- 
panies large foreign shipments of bullion, than in case of a 
country with a gold currency. 

STABILITY OF PRICES IS THE PRACTICAL RESULT OF A 
STABLE CURRENCY. 

Stability in the average scale of prices is the practical re- 
sult of a currency whose value is stable. In fact, the market 
quotations of prices, on the average, are simply a record of 
the fluctuations in the value of the money in which those 
prices are computed and paid. This test shows that for 
the past quarter of a century, the period which includes the 
years when several nations have made war upon silver, 
the value of silver has been more stable than the value of 
gold. Any one can readily test the accuracy of the above 
statement by comparing the prices of commodities each 
year, stated in gold, with what those prices would be if 
computed in silver. He will find that the apparent fall in 
the value of silver has kept about an even pace with the 
apparent fall of prices ; thus demonstrating that the value 
of silver has remained nearly stationary while the value of 
gold has been forced up by increased demand over twenty- 
five per cent. 

A great cry has been raised about the " depreciation " 



26o SOCIAL STRUGGLES. 

of silver. The '' 8o-cent dollar " cry is so apparently true 
that it deludes a multitude of persons. But every cloud- 
less day presents a similarly apparent fact ; to wit, the 
motion of the sun. It certainly does look as if it rose in 
the morning and traversed the sky throughout the day. 
What wonder that all mankind until within less than 300 
years supposed the earth stood still ! The " fixed value of 
gold" is an idea superficially and apparently true; — but 
in fact it rests on a delusion similar to the old belief that 
the earth had a fixed position. 

The only scientific test of the actual value of silver is 
found in a comparison of prices. Prices are an unfailing in- 
dication of the value of money, because average prices are 
the average judgment of mankind in regard to the relative 
value of different things, stated in money terms. 

In 1864 the silver dollar of 412}^ grains was worth four 
per cent, more than the gold dollar. But looo ounces of 
silver bullion will now buy more property than looo ounces 
of silver bullion would in 1864. Silver has therefore actually 
a greater value now than in 1864. 

THE I25-CENT DOLLAR. 

The facts would be correctly stated if it were said that the 
gold dollar has become the 125-cent dollar, and that who- 
ever lent gold in 1873 and is now paid in silver dollars re- 
ceives more value than he loaned. Instead of " cheap silver " 
he would be paid in silver dearer than gold in 1873. 

LABOR, A TEST OF VALUE. 

Adam Smith for a long time has been considered one of 
the ablest writers on political economy. Adam Smith says : 
"• Labor is the only universal, as well as the only accurate 
measure of value, or the only standard by which we can com- 
pare the values of different commodities at all times and 
places." 

As a result of progress in science and its application to 
art, more labor is yearly performed by machinery ; less mus- 
cular exertion is required from human hands to accomplish 



TEST OF VALUE BY LABOR. 26 1 

a given result. Consequently, whoever loaned 10,000 days' 
labor a hundred years ago, and is repaid now with the same 
number of days' labor, gets more value than he loaned. In 
addition to the labor loaned, he receives back the interest 
and the amount of products which 10,000 days' labor now 
represent in excess of what they were the equivalent of 
when the loan was made. But suppose we apply the meth- 
od recommended by Adam Smith to comparing the value 
of silver in 1885 with its value in 1870-1872. Nothing had 
then been heard about the "depreciation and fluctuation of 
silver." The bullion value of the silver dollar of 412^ 
grains was then 2 50- 100 per cent, higher than the bullion 
value of the gold dollar of 25 8-10 grains. A hundred 
ounces of standard silver bullion were then worth about 
$1167 in New York. A hundred ounces of silver are now 
(1885) worth about $960 in New York. 

Will $960 buy as much labor in New York in 1885 as 
$1167 would in 1870? Anyone with the slightest famili- 
arity with the wages of labor would answer this question in 
the affirmative. In fact, on the average throughout the 
United States, a smaller amount of labor was required to 
buy a hundred ounces of silver at any time for the ten years 
prior to 1872 than is required now.* 

SILVER HAS RISEN IN VALUE. 

Thus we find that instead of having fallen in value, as 
commonly alleged, a given nnviber of ounces of silver bullion 
has a greater value now, thus determined, than when the bul- 
lion value of the silver dollar tvas more than that of the gold 
dollar. The abused silver dollar in 1885 has actually a 
greater bullion value than the gold dollar had in any one of 
the ten years before the demonetization of silver. 

WHY SILVER HAS NOT FALLEN IN VALUE. 

The question naturally arises : Why has not silver bullion 
fallen in value in consequence of being demonetized by sev- 
eral nations ? It has thereby been placed under more unfav- 

* Note the change in the earnings of farmers, measured by the correct 
test : prices of farm produce at those different times. 



262 SOCIAL STRUGGLES. 

orable conditions than formerly. Why has it not fallen in 
value, not merely relatively to gold, but absolutely, when 
tested in a proper manner? 

If the demonetization of silver had been the only event 
occurring to change the various conditions which give value 
to silver, it would undoubtedly have largely depreciated. 
But several other causes have modified the result that 
otherwise would have followed silver demonetization. 

First. A steady increase both in the population and in the 
commercial and industrial activity of several nations, thus 
creating more demand for both gold and silver. 

Second. An increase in the consumption of silver in the 
arts. This arises both from a greater use of silver for pur- 
poses to which it was formerly applied, and from new in- 
ventions and new applications of its use. 

Third. The falling off in productiveness of some silver 
mines and the dissipation of former expectations that enor- 
mous amounts of silver would be easily mined. 

Fourth. The resumption of " specie payments " by several 
nations. A new paper dollar which performs all the functions 
of a metallic dollar has the same influence on the value of all 
metallic dollars in existence as the addition to the currency 
of a metallic dollar has. That is, every additional paper 
dollar depresses the value of every existing metallic dollar. 
On the other hand, the destruction of paper money enhances 
the value of existing metallic money just to the extent that 
the destruction of an equal amount of metallic money would. 
There is more demand for what is left in circulation, and its 
value is proportionally increased. 

We have replaced fractional paper money with silver coins, 
and have partially remonetized the silver dollar. In this way 
we have created a market for over two hundred million dol- 
lars' worth of silver. If the United States should stop the 
coinage of silver, the tendency of such a measure would in- 
evitably be to still further enhance the value of gold, and to 
correspondingly depress the value of silver, relative to the 
value of gold. 

As heretofore stated, the value of a thing always depends 



WHA T HAS AL WA YS OCCURRED. 263 

on the conditions under which it is placed. But it must 
be remembered that value does not depend on one condi- 
tion, but upon the aggregate influence of the whole num- 
ber of conditions. In the case of silver since 1872, one con- 
dition, viz., its disuse in several nations as a legal tender, 
tended to lower its value. But the various other condi- 
tions, above named, have so far neutralized the effect of de- 
monetization as to prevent any fall in its value. 

SILVER HAS ALWAYS FLUCTUATED IN VALUE. 

The aforesaid facts and principles explain the phenom- 
ena which have been a mystery to many ; viz., what 
have been called " recent fluctuations " in the value of a 
metal which for so long a time has been regarded as having 
a fixed value. 

Silver and gold have both always been subject to fluctua- 
tions in value. So long as a legal price was affixed to both of 
them, these fluctuations were obscured by what is called 
the " par value test." Besides that, the actual changes in 
the value of a currency composed of both gold and silver 
are less than the changes in value of a single metal. To 
make what is called " the fluctuation of silver " appear still 
greater, a combination of new conditions have been placed 
around gold, all of which have tended in one direction ; viz., 
to enhance its value. 

The legislative change of existing contracts produced by 
demonetizing silver and thus raising the value of the re- 
maining legal-tender metal is not the only nor the greatest 
evil inflicted on its citizens by a nation which adopts such a 
policy. By ceasing to use two legal-tender metals, and us- 
ing only one, a nation reduces by one-half the total volume 
of metal from which to coin its legal tender. As before 
illustrated by bodies of water of different sizes, a small 
amount of metal is more susceptible to changes of condi- 
tion than a large amount. Changes in its value are there- 
fore more easily produced, occur more frequently, and are 
greater in degree. 

Since England, in 18 16, adopted gold as the sole legal 



264 



SOCIAL STRUGGLES. 



tender, the value of her currency has been subject to 
greater fluctuations than that of any other nation. Prof. 
Jevons, himself a native and resident of England, says: 

" It is certain that the sensitiveness of the money market will increase^ 
and it is probable that commercial crises will from time to time recur^ 
even exceeding in their violence and disastrous consequence those whose 
history we know too well." 

The advocates of a single gold standard invite us to step 
upon this "sensitive" foundation which leads to such fre- 
quent panics. 

WHY ENGLAND HAS A GOLD CURRENCY. 

Why does England maintain gold as the sole legal tender 
when experience has shown that such a course creates 
great changes in the value of her money? 

England has largely increased in wealth since she adopted 
the gold policy. But she has had severe panics every five 
or ten years since that time. Her wealth is mostly in few 
hands. The rich are very rich and the poor very poor. 
There is an appalling amount of pauperism. England is 
governed by the rich and by an aristocracy. These persons 
believe that a few should govern the country, and that it is 
better for those few to own most of the wealth of the 
country. A gold policy is in harmony with these ideas be- 
cause it makes it easier to carry them out. English ideas 
and institutions have many rich and snobbish admirers in 
this country. These persons are almost unanimously in 
favor of making gold the sole legal tender. 

A gold policy makes it easier for a rich man to grow 
richer and harder for a poor man to become rich, because, 
under it the amount of money in circulation is subject to 
frequent and rapid changes. This causes great fluctuations 
both in the prices of commodities and labor, and in the 
rate of interest for money. Fluctuating prices operate 
specially to the disadvantage of the poor, and persons in 
very moderate circumstances. The rich can take advan- 
tage of a fall in prices to buy, and of a rise in prices to sell 



A DECEITFUL CRY. 26$ 

property. But a poor man, or a business man with little 
capital of his own, is often driven by his necessities to buy 
and sell at a disadvantage. He is also often forced to pay 
exorbitant rates of interest to prevent an utter sacrifice of 
his business and property. 

Those who ascribe all our troubles to the coinage of the 
silver dollar should remember that the industrial classes 
of England are far worse off than those of this country. 

SHOULD WE MAKE TIMES HARDER IN EUROPE? 

It has been urged by many persons that we should stop 
the coinage of silver for the express purpose of making- 
times in Europe still harder than at present, and thus in- 
ducing her remonetization of silver by international agree- 
ment. 

But it should be borne in mind that the distress in Eu- 
rope caused by the rise in value of gold enriches the cred- 
• itor classes ; and these are the classes which dictate Euro- 
pean policy. These persons would like to have their bonds 
made still more valuable than at present. Moreover, such 
a proceeding would increase the robbery of the debtors and 
tax-payers of this country. 

It is a suspicious circumstance that nearly every one who 
originally denounced the Silver Bill of 1878 is now raising a 
doleful wail for its repeal, under pretense of a desire to 
compel other nations to coin silver. As Falstaff said: 
" How this world is given to lying." 

ARE PAYMENTS IN SILVER HONEST? 

For several years a cry has been raised that payment of 
debts with silver dollars would be a dishonest thing for the 
United States Government, or for private individuals, to do. 
The denunciation of those who advocate the payment of 
Government bonds in silver dollars has been especially 
fierce. The national administration has thus far been con- 
ducted on the theory that silver dollars cannot rightfully 
be used in payment of bonds ; and consequently many mill- 
ions of silver have lain idle in the vaults while interest-bear- 



256 SOCIAL STRUGGLES. 

ing bonds were due. Let us examine the facts of this mat- 
ter. 

In the first place, it is clear that the United States Gov- 
ernment is bound, in honor, to do precisely as it agrees. 
The evidence of the agreement is the written bond to 
which every bondholder gave his assent when he bought 
and accepted it. If the Government pay less than agreed, 
it robs the bondholders ; if it pay more than agreed, then 
it robs the tax-payers. 

Nearly all the outstanding Government bonds were is- 
sued by authority of law passed in 1870. These bonds 
bear upon their face in conspicuous letters, this inscription: 
" This bond is issued in accordance with the provisions of 
an act of Congress, entitled, 'An act to authorize the re- 
funding of the national debt,' approved July 14, 1870; 
amended by an act approved January 20, 1871, and is re- 
deemable at the pleasure of the United States, after, etc., 
in coin of the standard value of the United States on said 
July 14, 1870, with interest in such coin." This constitutes 
the contract between the Government and the bondholders. 
It shows upon its face that it was contemplated that Con- 
gress might change the standard of value, and that it was 
expressly stipulated that the legal coins of July 14, 1870, 
were agreed upon as the means of paying both principal 
and interest. On July' 14, 1870, there were two legal-ten- 
der coins, either of which could be lawfully tendered in pay- 
ment of debt, viz., the silver dollar of 412^^ grains or the 
gold dollar of 25 8-10 grains. 

At that time, the silver dollar was worth 2 67-100 per 
cent, more than the gold dollar. The money-lending inter- 
est made no effort to have the word " gold" inserted in the 
bonds. They evidently preferred to have it worded as it is. 
In the light of their conduct since that time, it is certain 
that if events had made the gold dollar worth considerably 
less than the silver dollar, that the bondholders would now 
denounce the gold dollar as " dishonest." 

A agrees to deliver B lOOO tons of coal, one year hence, 
at $5 per ton. When the year expires, if coal is worth $6 



SUPERIORITY OF WRITTEN CONTRACTS. 



267 



per ton, A is both legally and morally bound to deliver the 
coal at $5 per ton. If coal is then worth $4 per ton, B is 
both legally and morally bound to receive and pay for it at 
the rate of $5 per ton. Suppose C should rent his farm to 
D and agree to receive either 200 bushels of wheat or 400 
bushels of corn for the yearly rent, D to have the option 
of selecting the kind of grain. If corn fell in price so that 
400 bushels of it were worth less than 200 bushels of wheat, 
C would have neither legal nor moral right to refuse to re- 
ceive the corn as agreed. Every principle of law and equity 
in these assumed cases applies to the bondholders. The 
incidental and unavoidable risks of contracts should be borne 
by them just the same as by other citizens. Every pur- 
chaser of a coin bond agreed thereby to receive payment 
therefor of the number of "dollars" on the face of it. 
These "dollars " were to be represented by 25 8-10 grains 
of gold, or by 4125^ grains of silver. The option of select- 
ing the kind of dollar rested with the Government. 
Whether silver have risen or fallen in value, is not a ques- 
tion which the bondholders have a right to raise ; they 
made their own bargain and are now bound to abide by it. 

WRITTEN CONTRACTS MORE RELIABLE THAN VAGUE UN- 
DERSTANDINGS. 

It is claimed that there was " an understanding " that the 
bonds were to be paid in gold. This is urging the Govern- 
ment to adopt a principle that not one of those who so 
urge would adopt for a moment in the conduct of his own 
private affairs. If after entering into clear and explicit 
written contracts, a man, or a government, should permit 
the setting aside of such contracts, and the substitution 
therefor of vague " understandings," all business would be 
reduced to chaos. It would be impossible to decide just 
what those indefinite understandings were. 

What is true of the national debt is largely true of State, 
city and private debts. The great majority of them were 
created under the contract of the debtor's option to dis- 
charge them either in gold or silver. Equity requires that 



268 SOCIAL STRUGGLES. 

original contracts be executed as agreed upon. A great 
cry has been raised that such a course would be "dishon-. 
est " because it would be payment in "the cheapest kind 
of money." But the creditors have invariably lent the 
" cheapest kind of money." They never lent silver, when 
gold was cheapest ; nor gold, when paper would answer. 
Why then should not the same privilege be granted the 
debtors ? 

A MAN CANNOT LOSE WHAT HE NEVER OWNED. 

Elaborate tables have been published showing how much 
the national bondholders and different classes of other 
creditors would " lose " if silver should be used instead of 
gold. A man cannot " lose " something he never possessed. 
As a matter of fact, the Government bonds were originally 
paid for in paper money, worth, on an average, over thirty 
per cent, less than the silver dollar then was. If paid in 
silver, the national bondholders will merely " lose " an 
opportunity to take from the tax-payers and debtors some- 
thing to which they have neither legal nor moral right. A 
similar thing is true of other classes of creditors. 

DIFFERENCES IN RELATIVE VALUE OF GOLD AND SILVER. 

As one of the chief arguments in favor of demonetizing 
silver, it has often been said that a bi-metallic currency 
occasions great losses and inconvenience because the two 
metals are liable to vary in value with regard to each other; 
and thus a nation with both gold and silver as legal tenders 
is liable to have changes occur in its kind of money, — gold 
displacing silver and silver displacing gold. Several plain 
facts are a sufficient answer to this argument. 

First. The material of which a nation's money is com- 
posed is secondary in importance to the stability in value 
of that money. When a change occurs in consequence of 
the appreciation of one of the metals relatively to the other, 
justice requires that the one remaining most stable shall be 
employed. So long as both metals are legal tenders with- 
out limit, a sudden change in their relative value is impos- 



HOW WE HARNESS HORSES AND OXEN. 269 

sible, because the disuse of one metal in one country will 
at once liberate a large amount of that metal for use in 
another country, and thus nearly restore the equilibrium. 
The dire commercial distress of the United States in 1876, 
1877, and 1878 was chiefly due to our engaging in a fierce 
competition with European nations for a supply of gold, 
enhanced in value by such a struggle. If we had not 
demonetized silver in 1873, the silver dollar would soon 
have become our metallic money, and prices in Europe and 
America would not have fallen as a result of struggles to 
keep and get gold. We should have let Europe quietly 
keep it, until without any disturbance it came to us in 
exchange for commodities, or for silver needed for the 
East, 

Second. It is almost impossible to find two horses, or 
two oxen of precisely equal size, strength and endurance. 
But, in fact, we constantly harness such unequal animals in 
pairs without a thought of the "absolute impossibility" of 
having them perform an equal amount of work. We sim- 
ply put an " evener " behind, or between them, and thus 
obviate all trouble which might otherwise arise from differ- 
ences in their fleetness or strength. In like manner, it is 
perfectly feasible to devise an " evener " which will obviate 
any inconveniences arising from changes in the relative 
value of gold and silver. It could be done throughout the 
world by international agreement. A single nation, the 
United States, for instance, could make an "evener" of its 
own which would always keep gold and silver in concurrent 
circulation. 

A SUGGESTION FOR CONSIDERATION. 

At the risk of being deemed presumptuous, I venture to 
suggest the following for consideration. For all future 
contracts, let gold and silver be made semi-legal tenders, 
i. e., all coin debts to be only legally payable by delivery of 
one-half their amount in gold dollars of 25 8-10 grains, and 
the other half in silver dollars of 412^ grains. Any con- 
tract or device to avoid this bi-metallic system to be voidable 



270 



SOCIAL STRUGGLES. 



by either party as contrary to public policy. The debtors 
vested option to pay in such metal as he chose to remain 
undisturbed with regard to all existing obligations. 

It appears that this would tend to create a greater stabil- 
ity in the value of a given number of " dollars " than exists' 
under the present system. Both kinds of coin would be 
kept in circulation because neither creditor nor debtor 
could use silver to the exclusion of gold, or gold to the 
exclusion of silver. A fall in the value of one kind of coin 
would almost inevitably be accompanied by a correspond- 
ing rise in the value of the other metal. It would be a 
mode of balancing, or compensating a fluctuation in the 
value of silver by a reverse change in the value of gold. 
Both metals could be blended by melting them into one 
coin, but this has been deemed impracticable on account 
of the danger of counterfeiting created by such a measure. 
The foregoing suggestion probably has some defect which 
would make it valueless. But it is morally certain that 
whenever the people desire the maintenance of a bi-metallic 
currency, in actual circulation, their combined wisdom will 
find a way to accomplish such a purpose. Moreover, as 
elsewhere pointed out, one of two legal tenders is per- 
forming an important duty when not in circulation, but 
standing guard to prevent an undue rise in value of the 
legal tender actually in use. 

Third. Although w^e are daily told that it is impossible 
to concurrently use both gold and silver as money, yet the 
plain fact is that it has been done from time immemorial. 
Substantially nothing was heard about the evils of using 
both gold and silver, until the creditor classes conceived 
the scheme of increasing their wealth by demonetizing one 
of the precious metals. The truth of the old adage : " He 
that wishes to whip a dog can always find a stick," was 
thereby again demonstrated. 

Fourth. If the allegations, that silver and gold cannot 
be concurrently used as money, and that gold is far supe- 
rior to silver in stability, be true, it logically follows that 
silver should be entirely demonetized throughout the world. 



DANGERS FROM RASH CHANGES. 



271 



For if the arguments used in favor of gold be true, how 
can a nation with a gold currency trade advantageously 
with a nation with a silver currency? In fact we are told 
that if we have a silver currency, commerce with gold-using 
countries will be impossible. If this were so, the silver- 
using nations could not trade with England as they now 
do. Those who make such statements forget the demon- 
strated fact that such an event would not interrupt our 
commerce for an hour. 

RESULT OF ENTIRE DEMONETIZATION OF SILVER. 

If silver were thus universally demonetized, conjoined, 
as such a measure naturally would be, by a proportionate 
destruction of paper money, the result would chiefly appear 
in an enormous fall in prices and consequent wholesale 
confiscation of the property of debtors. Laborers' wages 
would fall to a few cents a day. Every person materially 
in debt would at once be made hopelessly bankrupt. 
Nearly every nation, State and city on the globe would be 
forced either to repudiate its indebtedness, or to levy a tax 
so oppressive as to precipitate a bloody revolution if a for- 
cible attempt were made to collect it. In a short time all 
debts would be wiped out, either by bankrupt laws or by 
revolutionary decrees. Short-sighted creditors who ex- 
pected to seize the property of their debtors by virtue of 
the new contracts thus made by changing entirely the 
meaning of the word "dollar," "pound," etc., would 
probably find themselves seized by an outraged people. 
After a period of anarchy, the world would clearly see 
that it had suffered greatly, and gained nothing thereby 
but sad experience. 

THE IDEA OF COERCING ENGLAND. 

Many persons urge that the United States should at once 
suspend coinage of silver for the express purpose of still 
further depressing the value of silver relative to gold, mak- 
ing times still harder in England, and thus forcing her to 
remonetize silver. 



2/2 



SOCIAL STRUGGLES. 



Such persons forget two things. First. Harder times in 
England, thus made, means harder times for us. Second. 
The men who would suffer by still harder times in England 
are not the ruling class. England is ruled by creditors to 
whom such a measure, until revolution occurred, would 
bring increased wealth. If we could thus severely pinch 
the nobility and money kings of England, the case would 
be different. But even then we should look after our own 
interests and not attempt to interfere, with the affairs of 
other nations, except by setting a good example. 

OUGHT PRICES TO BE DEPRESSED BY LEGISLATION? 

The attorneys of the money-lenders substantially argue 
that as prices rose in consequence of the increased amount 
of gold yielded by the mines of California and Australia, 
therefore it is right for legislation to demonetize silver and 
thus put prices back where they were before 1850. 

But if this argument be a sound reason for legislative in- 
terference with coinage in behalf of money-lenders, why 
stop at the scale of prices just before the gold mines of Cali- 
fornia were discovered ? On the same principle, why not 
go back to the scale of prices prevailing in the world be- 
fore 1492 ? The discovery of the American mines of gold 
and silver revolutionized prices and commerce. If the 
doctrine be true that the amount of metallic money should 
be regulated by legislation, it follows that the only limit to 
legislative interference in that direction is the opinion of 
law-makers. 

Suppose we concede the groundless claim that silver has 
so increased in amount that it would have fallen in value 
even if it had not been demonetized. If this be reason for 
the creditor classes to demonetize silver, does it not follow 
that the debtor classes have an equal right to protection ? 
Have they not a right to say : '' Gold mines are failing, — 
gold is growing scarcer and dearer; let us diminish the 
weight of the gold coins." 



ANOTHER DELUSIVE CRY. 



THE BEST KIND OF MONEY. 



^71 



A ballot taken among a pack of wolves would always show una- 
nimity in support of the proposition, that sheep should be allowed un- 
limited freedom and not be hampered and injured by the restrictions of 
armed, vigilant and odious shepherds. 

The advocates of making gold the sole legal tender never 
weary of reiterating that such a policy would give us the 
"best kind of money." Let us see what this phrase means. 
For whom, for what classes, is gold the " best " money ? It 
is undoubtedly thought " best " for some persons else they 
would not desire it. The conduct of mankind is largely 
controlled by selfish considerations. Hence, when we see 
a class of persons who eagerly labor for the adoption of a 
certain policy, it is safe to presume that such a policy in 
their opinion is " best " for them. 

Money which is " best " for one class of persons is not 
necessarily best for the whole community. Money that 
is easily counterfeited is undoubtedly the " best kind of 
money " for those who wish to get their living by counter- 
feiting ; but for all other classes that money is best 
which is most difficult to counterfeit with impunity. 

Money which is steadily and inevitably increasing in value 
is "best " for those who own large amounts of bonds and 
mortgages. While such an event does not alter the nom- 
inal value of their securities, and is therefore often unnoticed 
and always superficially fair, it nevertheless does change 
their real value. For a man who loaned $100,000, due ten 
years thereafter, when an average day's labor of a common 
laborer was worth one dollar, that money is " best " which 
will enable him when the loan is repaid to buy with it the 
equivalent of 120,000 days' labor. But such money is not 
"best "for the debtors who are thus obliged to pay the 
equivalent of 20,000 days' labor more than received when 
they borrowed the money. 

For the purpose of speculators who have bought prop- 
erty to be delivered in future, that money is " best " 
18 



274 



SOCIAL STRUGGLES. 



which is rapidly depreciating in value. By such arn events 
the market price of what they have agreed to take at a 
fixed price is raised above the stipulated sum, and a profit 
thus made for them. This is so because their agreement 
was not to pay a fixed amount of value for the purchase, 
but a fixed number of "dollars"; no matter how much 
these " dollars " may have fallen in value, payment of the 
number named in the contract legally entitles them to the 
property. 

Money which can most easily be " cornered " is " best " 
for those who wish to create, at will, fluctuations in the 
stock and produce market. The smaller the amount of 
legal tender,, the more readily such schemes can be success- 
fully consummated. 

Those whose business is to deal in money, bills of 
exchange, stocks, bonds ; and to continually buy and sell 
all kinds of portable property, find profit in constant fluctu- 
ations in the value of money, and consequent incessant 
changes of market prices. Sometimes they lose largely by 
such changes ; but, as their facilities for acquiring and act- 
ing on information in regard to the markets are usually 
better than those of the general public, on the average, 
they make a profit out of these fluctuations. This is done 
by continually throwing the losing side of said fluctuations 
on the laborers, farmers, manufacturers and others whose 
occupations tend to lead them to think more about the 
general usefulness of things than about the changes in 
market prices. For such traders, that money is "best" 
which fluctuates most largely and most frequently in 
amount. 

STABLE MONEY BEST FOR THE MASSES. 

The interests of the great majority of the community 
are different from those of the aforesaid classes. For the 
masses, that money is " best " which is most stable in value. 
Fluctuations in the value of money produce fluctuations 
in the prices of all things bought and sold ; and, on the 
whole, the general public are the losers by such changes in 



WJ/y MEN THINK DIFFEKENTL Y. 



275 



prices. A few alert and cunning traders gain by changing 
prices, and this gain is always some one's loss. 

A STABLE CURRENCY BEST FOR DEBTORS. 

It is imagined by some persons that debtors are bene- 
fited by a depreciating currency. A few debtors may thus 
receive benefit ; but, on the average, the interests of debt- 
ors are best promoted by a currency stable in value. Debt- 
ors undoubtedly have one interest in the direction of 
money falling steadily in value; but the preponderance of 
their interests lies in favor of securing the greatest possible 
uniformity in the value of money. To a merchant, largely 
in debt for the goods in his store, the benefit derived from 
public prosperity largely outweighs any advantage he 
might derive from paying his debts in money less valuable 
than when he bought the goods. His aim is to maintain 
steady sales and get the difference between the wholesale 
and the retail price of his goods. Anything which is not 
to the public interest tends to diminish his sales in propor- 
tion to the injury thereby inflicted on the public. Thus 
the debtor's interests are, on the average, identical with 
the interests of the public ; viz., they are best promoted by 
a stable currency. 

WHY DIFFERENT CLASSES HAVE DIFFERENT IDEAS. 

The foregoing considerations explain why different 
classes have different ideas as to what constitutes the " best 
kind of money." Men's actions are usually the best indi- 
cation of their thoughts and wishes. From whence did the 
movement for making gold the sole legal tender originate ; 
and by whom has it been carried on ? Before looking for 
an answer to this question, we should naturally expect that 
those whose wealth would be increased by a currency rising 
in value, most easily controlled, and subject to the greatest 
fluctuations in purchasing power would be the ones to 
favor a currency possessed of those attributes. We should 
not expect such persons to zealously advocate a stable cur- 



276 



SOCIAL STRUGGLES. 



rency, because that would not best promote their selfish 
interests. 

A NOTORIOUS FACT. 

The notorious and undisputed fact is that those who 
originated and have maintained the movement toward 
making gold the sole legal tender, are precisely the classes 
whose interests are best served by an appreciating and a 
fluctuating kind of money. The money-lenders, the bank- 
ers, the speculators and the brokers, are the chief advocates 
of gold. Where silver has been demonetized, we find that 
such a step was not originated by the people ; but by the 
bankers, brokers, money-lenders and their various attorneys. 
Foxes do not spend a great deal of time and labor in devis- 
ing means for the protection of quail, partridges and other 
animals they feed upon. When a bankers' convention says 
that gold is the " best money," it means, in reality, that 
it is best for the bankers and those with kindred interests. 

The conspiracy for creating money " best " for the con- 
spirators will come to naught whenever the majority of the 
people fully see that the money " best " for a few is adverse 
to the interests of the many. 

A LETTER FROM AN "ECONOMIST.' 

The following letter is a good sample of the kind of 
argument commonly used to prove that gold, as the sole 
legal tender, is the best kind of money for the laboring 

classes. 

" In a recent article in the Sun, entitled the ' Cry of the Savings Bank 
Presidents,' and in opposition to their petition against the further coinage 
of silver, I find the following : 

" ' What the petitioners fear is evidently the depreciation of deposits, 
which they think would be caused by the victory of the silver standard. 
They assume that the dollars which are now worth 125 cents would sink 
to 100 cents, and depositors would lose the difference.' 

" In thus asserting or assuming that there are, or may be, two kinds 
of dollars in circulation, one worth 125 cents and the other 100 cents, you 
effectually knock out, it seems to me, from under the advocates of 



THE LABORING MAN'S INTEREST. 



277 



further or unlimited silver coinage every support to their position. Let 
us reason about it a little. 

" When any person, more especially one who depends upon the 
results of each day's toil to meet each day's needs, earns a dollar by his 
labor, what sort of a dollar is he entitled to receive ? Manifestly the very- 
best dollar. Manifestly, further, the laborer or bread earner, whoever he 
may be or wherever he may live in all this great country, can now have 
the best dollar of 125 cents (purchasing power) just as readily and 
cheaply as he can have the other kind, of a dollar, presently or prospec- 
tively worth less ; and he can continue to have it just so long as nothing 
is done to impair the power of the national treasury to exchange silver 
for gold on demand. Now why should the laborer be willing to abate 
anything of this privilege .'' And is not the man who advocates a policy 
whereby the laborer is compelled to receive a dollar inferior to the best 
inflicting an injury upon him ? Is he not the workingman's enemy ? 

" Again, the laboring man is told that he should favor free or continued 
coinage of silver, because the ' gold bugs ' don't want silver. But is not 
the argument based on such an averment all the other way } A gold 
bug is one who is credited with knowing all about money and looking 
sharp after his own interests. Well, if the gold bug is satisfied that a 
gold dollar is best for him, and the laborer can have a gold dollar for 
every one hundred cents that are due him, as he now can for the asking, 
why are not the interests of the gold bug and the laborer one and the 
same ? Is it a good reason because the gold bug wants roast beef and 
plum pudding that the laboring man should be asked to content himself 
with brown bread and raw turnips ? Can you furnish me or your readers 
with a pair of spectacles that will make this business of continued silver 
coinage look differently } 

"David A. Wells. 

"Norwich, J/arf//, 1886." 

In the first paragraph of what he is pleased to call " rea- 
son," Mr. Wells informs us that a laborer can get a dollar 
worth 125 cents just as '' readily and cheaply" as one worth 
100 cents. This statement necessarily implies that a 
laborer can obtain as many dollars, worth 125 cents each, 
for a week's wages as he could obtain for the same labor if 
those dollars were worth only 100 cents each. If this 
assumption were true 125-cent dollars would clearly be to a 
laborer's interest. Furthermore, it would be to the work- 
man's interest to further contract the currency so that a 
dollar would be worth 1 50 or 200 cents. 

The only difficulty with Mr. Wells' assumption is that it 



2/8 



SOCIAL STRUGGLES. 



is not true. The number of dollars paid a laborer for a 
week's wages depends on the value of each one of those 
dollars. The higher the value of the dollar, the smaller the 
number of those dollars paid for a given amount of work. 
Hence there is no truth in the assertion that 125-cent dol- 
lars can be had as " cheaply " as dollars worth 100 cents 
each. Employers are not in the business of giving 125 
cents' worth of money for 100 cents' worth of work. The 
greater the value of a dollar the greater the number of 
hours' labor must be given in exchange for one. 

Mr. Wells next informs us that " the interests of the gold 
bug and the laborer are one and the same." That is, the 
interests of the owners of the eight thousand millions of 
national, State, municipal and rail road bonds, due from the 
people of this country, are identical with the interests of 
those whose labor must directly or indirectly pay both 
interest and principal of those bonds. Is this true? 

If every one of the ''dollars," which in the aggregate 
form this vast public debt, be worth 100 cents, and at the 
same time an average day's wages be worth 100 cents, then 
eight thousand million days' labor will pay these bonds. 
But if we increase the value of each one of the " dollars " 
constituting those bonds to 125 cents, then it will require 
ten thousand millions of days' work to discharge this debt. 
By increasing the value of a dollar to 125 cents, the bond- 
holders have increased the value of their bonds to the 
extent of two thousand millions of days' labor. Are the 
interests of those who are to receive this extra two thou- 
sand millions of days' work identical with the interests of 
those upon whom this additional burden has been laid and 
who must pay it from reduced wages ? 

The laborers of this country owe a great number of " dol- 
lars." When this debt was created each one of these " dol- 
lars " represented a certain number of hours' labor. Is it 
to the laborers' interest to increase the number of hours* 
work which must be paid for a dollar, and thus increase the 
amount of work which will have to be performed to cancel 
said debt ? 



CHANGING THE MEANING OF A WORD. 279 

Mr. Wells argues that when the meaning of the term 
"one dollar" is so changed that it really means 125 cents, 
those who owned or had due them thousands of millions 
of those " dollars " do not profit by such a change any 
more than those who had no "dollars" on hand, and who 
must buy these enhanced dollars by giving more hours' 
work for each one of them. He labors to persuade us that 
when a debt of one hundred dollars is changed by sly legis- 
lation to a debt of one hundred and twenty-five dollars, the 
creditor and the debtor have the same interest in this ras- 
cality. 

Mr. Wells omits stating the vital point ; to wit, that when 
legislation practically changed the meaning of the term 
" one dollar," the number of those dollars paid for a week's 
or a year's wages was diminished, but the number of those 
dollars due the owners of evidences of debt remained un- 
changed. 

Mr. Wells and his co-laborers are like Louis XVI. A 
revolution is in progress and they are oblivious of the fact. 
The American people have fairly begun to think for them- 
selves. Pretenders to a monopoly of economic knowledge 
will not be able to mislead them in future as easily as they 
have heretofore. They are beginning to see that a legal 
restriction of the number of either gold or silver dollars may 
be " best " for a feiv, because it silently increases the value 
of their property and lowers the value of that of all other 
persons. 



CHAPTER X. 

Is Money Capital ? — Nature of Capital. — Similarity between Money and 
Blood. — Money helps Production without forming Part of Products. — 
No kind of Capital produces without Labor. — Many kinds of Capital 
have special Functions. — All Hoarded Things are Useless when 
Hoarded. — A useless Thing is not Capital. — When Money is used. — 
The true Test of Money. — Control of Money is Control of Labor. — 
How Money may be Controlled. — Who should control the Amount 
of Money. — The true Doctrine. — Jeffersonian Democracy. — A Con- 
servative Measure. 

A single false premise may be the parent of a long train of 
evils. 

It is generally taught that money is not capital. A 
recent writer of an orthodox treatise on money says : 

" Except in a qualified and peculiar sense, money is not capital. It 
has no direct agency in production ; does not enter as a constituent part 
into the products of industry, like iron or cotton. Of itself, it produces 
nothing ; brings no gain to the holder. What is called interest is earned 
wholly by capital, and is paid exclusively out of the profits of the latter. 
He who has money and wishes to obtain an income from it, exchanges 
it without delay for capital. For the purpose of hoarding, without refer- 
ence to use, it is worth no more than any other measur say a bundle 
of yardsticks." 

The above quotation misstates an elementary principle 
and propounds a doctrine, the general belief in which has 
led to serious legislative errors, Laws have been made 
based on the assumption that, as money is not capital, 
meddling with money is not an interference with capital. 

NATURE OF CAPITAL. 

In our study heretofore of the nature and attributes of 
capital, we found that any tool, machine, or agency which 
makes it easier for labor to create wealth than it otherwise 
could, is capital in the full sense of the term. A farm- 

280 



WHAT CAPITAL IS. 28 1 

er's oxen, plow, and cart, are capital ; they are the tools 
which help and lighten his labors. A railroad car is capital, 
because it facilitates the interchange of commodities and 
thereby aids those engaged in producing the necessaries 
and comforts of life. As rapid transmission of information 
is a potent auxiliary of fruitful industry, the telegraph is 
capital. Money is capital, because money is used as a rep- 
resentative, and as a storehouse of labor ; and because 
money makes it easier for mankind to exchange labor and 
the products of labor than it would be by barter. Money 
facilitates the creation of wealth by acting as a distributing 
agent. 

SIMILARITY BETWEEN MONEY AND BLOOD. 

The function of an animal's blood is to carry and bring 
materials of various kinds to and from all parts of the or- 
ganism. Money performs a similar duty for the body of 
society that blood does for the body of an animal. Blood 
associates each part of an organism with every other part, 
and thus renders it possible to divide the labor and func- 
tions necessary for maintaining life among different organs 
remote from each other. Money performs a similar duty 
for society ; it makes it easier for mankind to associate to- 
gether, and to divide the multitude of labors requisite to 
maintain society in that high state of perfection which gives 
each man, while performing a single special duty, benefit 
from the great variety of different duties performed by 
other individuals. Money is the life-blood of commerce. 
In an advanced stage of society, it is the most useful of all 
forms of capital, because it is the medium which brings 
the various kinds of capital in relation and association with 
each other, and with labor, and thus enables them to mutu- 
ally help each other. 

MONEY HELP3 PRODUCTION WITHOUT FORMING PART OF 

PRODUCTS. 

The aforesaid writer tells us that money "has no direct 
agency in production and does not enter as a constituent 



282 SOCIAL STRUGGLES. 

part into the products of industry." This is true, but does 
not in the sHghtest degree prove that money is not capital. 
No one will deny that a railroad and its equipments run- 
ning through the middle of a fertile and populous agricultural 
district are capital. The railway cars have no " direct 
agency " in production, ^they neither plow nor reap. Fur- 
thermore, the cars and engines are not wrought into " con- 
stituent parts of any of the products " of industry. The 
function of the railroad is distribution. It carries to the 
farmers the various things they need to cultivate their farms, 
and to supply the wants of themselves and families. It 
carries /r<3/w the farmers the surplus products of their farms, 
and takes them to their destination,- — the consumers of 
those products. The railroad thus helps the distant work- 
ers in the factory and the forge ; and the farmers of lands 
in another climate producing different products, to' hold 
commercial intercourse with the farmers adjacent to its de- 
pots. A railroad is capital because it helps labor to associ- 
ate with labor, and capital to associate both with labor and 
with other forms of capital. Money is capital for the same 
reasons that a railroad is. 

NO KIND OF CAPITAL PRODUCES WITHOUT LABOR. 

The above author further says : " Money of itself pro- 
duces nothing." But does this prove that money is not cap- 
ital ? Plows of themselves produce nothing. They are ut- 
terly useless unless associated with labor and other forms of 
capital. Nevertheless, no one will deny that plows are cap- 
ital of a very useful kind, — they help labor produce wealth. 
What is true of plows is true of all other kinds of capital ; 
they create and produce nothing of themselves. Their use- 
fulness begins only when associated either with labor, or 
with both labor and other kinds of capital. 

MANY KINDS OF CAPITAL HAVE SPECIAL FUNCTIONS. 

Our author admits that money in a " qualified sense " is 
capital. He thinks money is capital only in the sense that 
it can be exchanged for capital, and thus performs only a 



WHEN A THING IS NOT CAPITAL. 283 

Special function. But this fact makes money capital in all 
senses of the word. Many kinds and forms of capital have 
special functions and duties. A threshing machine is good 
for nothing whatever but to thresh grain. A reaper is good 
for nothing but to cut grain. A wagon is good for nothing 
except as a machine to facilitate the transportation of vari- 
ous things. But no one will deny that threshing machines, 
reapers and wagons are capital. What is true of them is 
true of every other form and kind of capital. The range 
of use to which different kinds of capital can be put varies, 
but all are controlled by the same principle ; limitation to 
helping labor perform special duties. 

ALL HOARDED THINGS ARE USELESS WHEN HOARDED. 

The aforesaid teacher also tells us that " for the purpose 
of hoarding without reference to use," money is useless. 
This he appears to think conclusive evidence that money is 
not capital. 

But is not this true of all other forms of capital ? A car- 
penter's tools are capital. But if stored away in the garret, 
without reference to use, they are useless. So long as 
stored, they are not a help to labor, and are of no more 
value than so many chips. The machinery of a factory is 
capital. But if taken down and stored " without reference 
to use," it is useless. Similar things are true of all other 
forms of capital. So long as hoarded and idle, they are, 
practically destroyed and useless. What use would any 
tool or machine be, if " stored without reference to use "? 

It has been said that " if moneybe capital, and if money 
can be made of paper, or other cheap materials, that an un- 
limited issue of paper money would create an unlimited 
amount of capital, and thereby enrich the nation doing so. 
Whereas history shows the contrary to be true." 

A USELESS THING IS NOT CAPITAL, 

The aforesaid argument is the offspring of ignorance of 
the nature of value and how it is created. A barn is capital 
to a farmer, — it helps his labors in storing crops and shelter- 



284 



SOCIAL STRUGGLES. 



ing cattle. But because two or three barns are capital, it 
by no means follows that an unlimited number of barns 
would be. They would merely encumber the ground, and 
until removed would injure the farm. A similar thing is 
true of all other farming capital. Of what use would a 
dozen threshing machines be to a man who only needed 
one? The additional eleven machines would not add to 
the farmer's capital, simply because they would not facili- 
tate his labors. A thing is of no value unless it supplies a 
want. Its value therefore depends upon the conditions 
under which it is placed. Nothing is capital unless it sup- 
plies a want of labor, or of other capital, and thereby assists 
either the production or exchange of valuable things. 

When a community is supplied with a sufficient amount 
of capital in form of paper money, an addition to the 
amount of that money would not add to their capital. 
This would be so, for precisely the same reason that would 
make an additional ice house of no value to a man who al- 
ready had one, and needed no more. 

A queer man in my neighborhood once made and used a 
wagon with five wheels. But his methods of thought were 
no more absurd than the methods of those who argue that, 
because one certain thing is capital, possession of an un- 
limited number of those things would necessarily increase 
the capital of their owner. 

Most of the foregoing mistakes are due to the prevalent 
idea that money has mysterious qualities. A man who 
recognized clearly the simple fact that money is governed by 
precisely the same laws that govern all other things, would 
never imbibe the error of supposing that money is not cap- 
ital, in the fullest sense of the term. 

WHEN MONEY IS USED. 

We have heretofore seen that in a simple state of society, 
and under some' circumstances, labor can associate with 
labor, and capital can associate both with labor and with 
other forms of capital, by means of barter. As society ad- 
vances, its labors are more and more divided among differ- 



MONEY MAY CONTROL LABOR. 



285 



ent persons, each performing a single special duty. This 
renders commercial intercourse between the different mem- 
bers and portions of society more difificult and expensive, if 
carried on by means of barter. Money has been invented 
to remedy this difificulty? By its use, the citizens of a 
populous country, engaged in a great diversity of occupa- 
tions and inhabiting a large area of territory, can associate 
commercially with each other as freely as the residents of a 
small area can by barter. 

THE TRUE TEST OF MONEY. 

The excellence of the quality of money is properly meas- 
ured by the same test we apply to any other form of cap- 
ital created to perform a special duty ; viz., the efficiency 
and cheapness with which it performs its work. A set of 
harness made of plain good leather is capital. Its value, as 
•capital, to its user would not be any greater if it were plated 
with gold or silver. As heretofore shown, mankind have 
steadily improved the excellence of their money, until ex- 
changes by its use can generally be made cheaper than by 
barter. It follows that when a people have largely out- 
grown barter as a means of industrial and commercial inter- 
course, and as a means of associating the various forms of 
labor and capital, that the labor of that country is then de- 
pendent on the thing which has taken the place of barter ; 
viz., money, the capital whose chief function is the associa- 
tion of labor and capital. Moreover, as capital is useless 
unless associated with labor, it also follows that the disuse 
of barter makes all the other forms of capital in a country 
largely dependent on the form of capital we call money. 

CONTROL OF MONEY IS CONTROL OF LABOR, 

Therefore, whatever class controls the money of a coun- 
try controls both the capital and the labor of that country 
to a large extent. Those who control the money of a coun- 
try are in a position similar to that of a person with control 
■of the blood-vessels supplying an animal's system with the 



286 SOCIAL STRUGGLES. 

means of associating its different parts and organs with 
each other. 

The fact has been partially brought to public attention 
that when a few men control the railroads of a country they 
largely control the means of communication, and, conse- 
quently, the commerce and industry of that country. By 
an apparently slight addition to either freight or fare, they 
can levy an enormous tribute from the nation. They can 
thus diminish the profits of other forms of capital, and the 
wages of labor, by a general tax on all property and persons 
transported ; and this tax will be more or less distributed 
until it reaches every self-supporting person in the land. 

But railroad control is of little influence in a country^ 
compared with the tremendous power incident to the con- 
trol of the money of a country. Such a control means that 
the facilities for the association of all the labor of that 
country, both with itself and with various forms of capital, 
are largely in the hands of those who govern the capital 
called money. Such a power is the more dangerous, be- 
cause it can be so insidiously exerted that the great major- 
ity of its victims do not know the real source of their 
troubles, and are prone to attribute them to things which 
have no influence whatever. 

Large numbers of workmen have engaged in strikes 
against low wages, supposing them due to the tyranny of 
employers, when, in fact, their employers had been made 
helpless by those who controlled their chief means of com- 
mercial intercourse and association. They have acted as 
men frequently do when pressed in a crowd. Instead of 
reflecting that those who push, do so because they are 
crowded by others, they grow angry and strike persons who 
are helplessly jostled against them. 

HOW MONEY MAY BE CONTROLLED. 

There are four principal means of controlling the money 
of a country. First. By increasing its amount. This can 
be done by diminishing the weight and fineness of coins, 
or by the issue of paper money. Second. By diminishing 



REGULATION OF THE AMOUNT OF MONEY. 



287 



its amount. This can be done by increasing the weight 
of coins ; by diminishing the number of legal tenders, as 
has been done by demonetizing silver, or by diminishing 
the amount of paper money. Third. By changes in the 
rate of interest. Fourth. By hoarding the money in exist- 
ence, thus practically, for the time being, diminishing its 
amount as effectually as if the money were destroyed. 

WHO SHOULD CONTROL THE AMOUNT OF MONEY. 

Two opposing ideas exist in regard to the proper method 
of controlling the money of a country. One class of per- 
sons say that the people are competent to make national 
and State constitutions ; to make civil laws of all kinds ; 
to direct how men shall deal with each other; how con- 
tracts shall be enforced ; how laws shall be administered ; 
how the sexes shall marry and be divorced ; how property 
shall be taxed, held, and divided ; and how orphans and 
widows shall be protected. Most of this class regard the 
idea that there should be a union of church and State as a 
relic of barbarism. They believe the people are capable of 
regulating their moral and religious conduct ifor themselves 
without being governed by an oligarchy of priests. They 
also admit that the people are competent to make and ex- 
ecute criminal laws ; that it is safe to entrust them with 
power to declare when a man shall have liberty ; when he 
shall be put in prison, and when he shall be hung. 

But although they concede all these things, they hold 
that the people who use and are dependent on the money 
of a country as a means of associating labor and capital, 
and as a potent help in distributing wealth, should not 
have the control of that money. 

This class holds that the amount of metallic money in a 
country should be controlled by the rich men of that 
country ; that whenever there is a probability that in- 
creased production of mines shall result in such an in- 
creased amount of coin as to raise the wages of labor and 
the prices of the products of labor, that the Legislature 
should interfere. The character of this interference, they 



288 SOCIAL STRUGGLES. 

hold, should consist of demonetizing one or other of the 
legal-tender metals ; or of increasing the weight of the 
coins, the extent of this to be decided by the money- 
lenders. 

This class further propose that all the paper money of a 
country should be issued and controlled by an oligarchy, 
and that the yearly salary of these officials, in the aggre- 
gate, shall be from twenty to forty millions of dollars. 
This oligarchy to have power to contract or inflate the 
currency, and to raise or lower its rate of interest, at will. 
In other words, they are to be legally invested with power 
to regulate the association of labor and capital, and to raise 
or lower the prices of all the commodities, real estate and 
labor of the country in such manner as may seem judicious 
to their minds and most likely to increase their own 
wealth. 

These officers are to be styled NATIONAL BANKERS, and 
their salaries collected and paid with the interest on debts, 
in the form of promissory notes, issued by themselves. 

The foregoing ideas are essentially those which recently 
have largely controlled the policy of this country. On 
their side are arrayed the majority of the capitalists ; and, 
as a sequence, the greater portion of the politicians and 
newspapers. 

THE TRUE DOCTRINE. 

The other idea is that the people are competent to make 
laws of all kinds ; civil, criminal, religious and finan- 
cial ; that the people are the best guardians of their own 
interest ; and that it is wiser, safer, and cheaper to trust 
the people to issue money than it is to put their rights 
into the hands of an oligarchy whose selfish interests are 
often opposed to the interests of the masses. 

The masses of the people formerly had no voice in mak- 
ing laws of any kind. Their property, liberty and lives 
were at the mercy of a monarch, or of an oligarchy. For 
centuries the people have been slowly assuming their right 
of self-government. Although the idea that all power 



GENUINE DEMOCRACY. 



289 



rests rightfully in the hands of the people is the corner- 
stone of American institutions, we have retained the mo- 
narchical principle that the people are unfit to take care of 
themselves financially and must be controlled by a small 
class. 

The selfish interests of a few rich men are frequently 
apparently advanced by great fluctuations in the value of 
the national money , whereas, the interests of the majority 
of the people are promoted by securing the greatest possi- 
ble stability in the value of the currency. 

JEFFERSONIAN DEMOCRACY. 

Those who fully believe in genuine Democracy ask that 
the principle of self-government be carried to its logical con- 
clusion ; that we take one step more in the direction in 
which the race has been progressing ; that as the people 
have taken control of civil and criminal legislation, taxa- 
tion, religion, and education, they should also control 
the finances entirely ; and that the intelligence of the 
WHOLE PEOPLE is greater and more trustworthy than that 
of a few bankers. 

These persons therefore desire • First. That the estab- 
lished standards of coinage should not be tampered with in 
the interest of a few, either by raising or lowering the 
weight or fineness of coins, or by demonetizing either of 
the precious metals. 

Second. That the issue of paper money should be taken 
entirely away from the banks, and be so regulated in amount 
as to produce the greatest possible stability in its value. 

A train of cars can gradually run up and down a chain of 
mountains with safety, while an abrupt change of a few feet 
in the grade would produce an utter wreck. Business can 
adjust itself to new conditions with little industrial disturb- 
ance, provided the changes are made very gradually. As 
business is so largely dependent on the capital called 
money, all financial changes should be begun only after the 
fullest debate and the widest possible publicity. Even 
then, they should be proceeded with very slowly and cau- 
19 



290 



SOCIAL STRUGGLES. 



tiously. As large bodies move much more slowly than 
small ones, rash changes in the national money are much 
less liable to occur by the act of the whole nation than by 
the act of a small class. The demonetization of silver, and 
several other bad measures, could never have been carried 
out if full publicity had been given them. 

A CONSERVATIVE MEASURE, 

True conservatism bids us place the regulation of money 
in what experience shows is the safest repository of all 
other power : /. e., in the hands of the people. It was 
formerly imagined unsafe to have judges elected by univer- 
sal suffrage ; but extended experience has shown that to be 
the safest mode of securing an upright and able judiciary. 
If the people be unfit to control their financial affairs they 
are surely unfit to control their religious affairs, and we 
need a State religion controlled by a few men. If the peo- 
ple should not assume full control over everything, then we 
should logically restrict suffrage, and take one right after 
another from them until we reached a government akin to 
that of King John before the Barons threatened him at 
Runnymede. 



CHAPTER XL 

Effect of Changes in the Amount of Money. — What a Dollar is. — Why 
Prices fall to such an Extent when the Coinage is Contracted. — 
How we state the Value of a Dollar. — Effect of Habit on Ideas of 
the Value of a Dollar. — Dollars and Bushels are Governed alike. — 
How Monopoly can Change Prices.— Monopoly -can Change the 
Value of a Dollar. — Monopolies in California. — Money Kings wish 
to Corner Money. — Creditors can be robbed by Inflating the Cur- 
rency. — History of Inflations. — Paper Money is not Helped by What 
is "back of it." — Inflation is possible without Issuing Paper Money. 
— Paper Money Inflation a Pretext for Crime. — Not a Fancy Sketch. 
— Sudden Changes in the Currency Paralyze Business.— Why Money 
is hoarded when Prices are falling. — The true Test of the Cheap- 
ness of Money. — Difference between Temporary Possession of 
Money and Ownership of it. — A Mistake in Diagnosis. — A Typical 
Writer. — Lack of Confidence ia Prices is the Reason Men hoard 
Money. — Effect of slow Changes in the Amount of Money. — What 
we should seek. 

The chief distinction between Wealth and Poverty is that 
rent and interest are paid by the poor ajid received by the rich. 
Contraction of the amount of money insidiously increases the 
tribute paid by labor to capital. 

We have heretofore found that ordinary commercial 
transactions are carried on by the use of an imaginary 
money, — the money of account ; the terms in which values 
are compared, computed and recorded. We have also 
found that this imaginary money has a variety of represen- 
tatives in form of coins and paper money. Furthermore, 
we have learned that from habit and experience, the resi- 
dents of each country have continually, and largely uncon- 
sciously, in mind an idea of the value of the unit of the 
money of account. Having this in mind, they readily com- 
pare and compute values without direct reference to the 
current money, the particular representative of the money 
of account, which may chance to be in actual use. We 

291 



292 



SOCIAL STRUGGLES. 



will now more fully inquire how the value of this unit of 
the money of account first becomes established in the pub- 
lic mind, and how this idea of value may be changed by 
influences which affect the current money. We have here- 
tofore seen that all values are compared and computed by 
a numerical method. We start with one dollar, one pound, 
one franc, or from some similar standpoint ; but our com- 
parisons are always with the unit, ONE. Once having in 
mind the value of this unit, it is readily multiplied and 
divided, and thus all amounts of value are estimated and 
stated. Our inquiry therefore is complete, when we find 
how the value of the unit of all moneys of account is first 
obtained, and how this idea of value may be changed. 

WHAT A DOLLAR IS. 

As the principle is the same in all moneys of account, for 
convenience we will confine ourselves to a study of the 
"dollar," how we first get an idea of the value of a dollar 
and how this idea may be changed. 

A dollar is an unit of value. Value is a mental concep- 
tion — -a judgment, or estimate, of the relative amount of 
labor or sacrifice which a given thing is worth. We use 
the term " dollars " in stating this idea, as a means of mak- 
ing ourselves understood by others, just as we use the fig- 
ures I, 2, 3, as a help in conveying our ideas in regard to 
numbers. A given number of " dollars " represents an idea 
of value similar to the manner that certain letters represent 
an idea of sound, or certain figures represent an idea of 
quantity. 

Much has been lately said about " 80-cent dollars," " 90- 
cent dollars," etc. This is merely a loose way of stating 
loose ideas. The cent is not the unit of value — it is sim- 
ply one hundredth part of a dollar. Therefore every " dol- 
lar," no matter what its real value, contains just one hun- 
dred cents. 

Money derives value from the fact that its use is not 
only always convenient, but almost absolutely necessary to 
carry on the extended and intricate commerce of modern 



VALUE OF A DOLLAR. 293 

times. It is the form of capital by whose intervention all 
other kinds of capital are brought in relation and intercourse 
with each other. It is the medium through which the 
association of labor and capital is chiefly conducted. 

The value of one dollar depends on its relative importance 
in commercial transactions just as the military importance 
of one soldier depends on his relation to the whole force. 
One soldier is of considerable consequence in a squad of 
ten men but of very little importance as one of an army of 
fifty thousand. In one case, he forms ten per cent, of the 
whole force ; in the other case he is only one fifty thou- 
sandth part of the army. What a single dollar shall be 
worth is determined by the total number of dollars in cir- 
culation. 

The greater the number of dollars, the smaller the rela- 
tive importance of each dollar. The relative importance, 
and therefore the value, of ONE DOLLAR is governed by the 
same law that governs the relative importance and value of 
any other ONE thing. The dollar is the unit of value and 
the worth of this unit depends on the relation which exists 
between the total value of the exchanges daily effected by its 
use, and the total number of these units in circulation. 
For example, if seven hundred millions of units be in cir- 
culation in a country like Peru or Chili, each unit will have 
a less value than it would if seven hundred million of units 
were in circulation in a great, rich nation like the United 
States. If a hundred million units be in circulation, a man 
with a million dollars has one per cent, of the money in the 
country ; increase the amount of circulation to a thousand 
millions and a man with a million will then have one-tenth 
of one per cent, of all the money, and his ability to purchase 
property will be correspondingly decreased. 

When Paris was surrounded by the German army, the 
idea of value previously attached to each barrel of meat 
and flour was increased. The demand for food was sub- 
stantially unchanged, but the number of barrels of food 
was daily growing smaller. Hence each barrel steadily 
became of greater relative importance, simply because the 



294 



SOCIAL STRUGGLES. 



relation between the number of barrels and the demand 
therefor was steadily changing. The total number of bar- 
rels, therefore determined the importance and value of one 
barrel. 

When a considerable portion of the grain crop of a 
country is destroyed, each bushel of the remainder becomes 
more valuable. This is so, for precisely the same reason 
that each dollar remaining in a country, becomes more val- 
uable by a partial destruction of the dollars in that country. 
In one case, the NUMBER of bushels is lessened. In the 
other case, the NUMBER of dollars is lessened. Each remain- 
ing '' bushel " has been raised in value because the NUM- 
BER of those bushels has been diminished. Each remaining 
"dollar" has been raised in value because the NUMBER 
of those dollars has been diminished. 

If the number of dollars in circulation be reduced from 
one hundred millions to fifty millions, a man with one 
million dollars, instead of having one per cent, of all the 
money in the country (as he would have when a hundred 
millions were in circulation), would have two per cent, of it. 
But the difference between one and two per cent, would not 
be a correct index of the amount of property which a million 
dollars would then buy. 

WHY PRICES FALL TO SUCH AN EXTENT WHEN THE 
CURRENCY IS CONTRACTED. 

The value of all the money in a country is always only a 
small percentage of the value of all the other property in 
that country. A trifling change in the short arm of a steel- 
yard causes a considerable movement in the long arm. 
Money may, therefore, be fitly compared to the short arm 
of a steelyard, and all other property to the long arm. A 
slight change in the amount of money makes a very decided 
change ;n the amount of property that can be bought with 
it. In 1872, the premium on gold in this country was about 
ten per cent. Most of our " statesmen " and "scientific 
financiers " thought that an immediate ten per cent, con- 
traction of the currency would only make a difference of 



WHA T A PRICE IS. 



295 



ten per cent, in the amount of property which a given 
amount of dollars would buy ; but events showed that the 
fall in prices was far more than that. 

HOW WE STATE THE VALUE OF A DOLLAR. 

We state our ideas of the value of a dollar by what we 
call "prices." That is, the price of a thing is our idea of 
its relative value as compared with a dollar. 

When there are one hundred millions of dollars in circula- 
tion, a man who puts a price of one hundred dollars on his 
horse thereby really (but usually unconsciously) says : " I 
will sell my horse for one millionth part of the money in 
the country." Diminish the circulation in the same country 
to ten millions of dollars and it would then require an enor- 
mously more valuable horse than in the aforesaid supposed 
case, to bring a hundred dollars, as that sum would then 
be one hundred-thousandth part of all the money in the 
country. 

The average scale of prices in a country represents the 
average judgment of the community in regard to the 
relative value of commodities and money, just as the above 
supposed price of a horse does that of its owner. These 
results are usually reached by daily and insensible changes 
in the judgment of individuals with regard to prices, and 
not by a conscious analysis of the subject. 

During the late war an acquaintance in Alabama sold a 
little steer for twenty-five hundred dollars. The price was 
apparently high, but not so in reality. It was merely the 
judgment of both seller and buyer in regard to the relation 
which then existed between the value of the steer and the 
fraction of all the money in the Confederacy which twenty- 
five hundred represented. The money of the Confederacy 
had been so increased in amount that a larger number of 
dollars were required to represent the proportion which 
the value of the steer bore to the money. Therefore, 
prices are the estimate of mankind of the relative value of 
one thing to another, as compared with money. The term 
^' price " is ordinarily employed to denote the amount of 



296 



SOCIAL STRUGGLES. 



value possessed by a given thing expressed in terms of 
money. Thus, when we say, " Wheat is worth two dollars a 
bushel," two dollars is the ''price" of a bushel of wheat. 
But while we constantly use language in such way as to 
imply that the value of the thing to which we affix " a price " 
is the sole fact we wish to determine, in reality, we put a 
price on the money just as much as we do on whatever we 
" price." When we say " corn is worth half a dollar per 
bushel," we virtually say that the price of a dollar is two 
bushels of corn. 

The average scale of prices, or, what is called the " mar- 
ket price," represents the average judgment of the commu- 
nity in regard to this relation. This dominant opinion is 
the result of daily interchange of thought between the 
various members of society and of the incessant bantering 
and bargaining between sellers and buyers. The market 
prices are fixed, and change in men's minds without their 
usually being conscious of the sources of their opinions. 

EFFECT OF HABIT ON IDEAS OF THE VALUE OF A DOLLAR. 

When the money of a country for a considerable number 
of years has remained at a nearly uniform volume, prices 
tend to become established, and all debts and contracts are 
made with reference to the prevailing prices. To state the 
same fact in another way, by long habit the value of the 
dollar, the unit of the money of account, becomes so fixed 
in the public mind that we estimate a given number of 
" dollars " with little reference to the actual thing which 
represents them. After this idea of the value of the unit 
of the money of account is once fixed in the mind of a 
nation, it requires a considerable time and striking events 
to dislodge it. However, when current money is rapidly 
and largely increased in amount, the money of account 
slowly but finally changes to meet the altered condition. 
But the former ideal money of account is reinstated in 
public opinion soon after the accidental conditions which 
changed it are removed. 

Thus from 1789 to 1796, the currency of France was 



CHANGES IN PRICES. 



297 



enormously inflated by issues of paper money. These issues 
were so large in amount that prices rose to one, two, and 
three hundred times their original sum. Prices rose so 
rapidly that people's ideas of value, stated in money, were 
mere guesses. It seemed as if the money of account had 
been utterly destroyed by this carnival of folly. But after 
the inflated paper money had all been wiped out by repu- 
diation, it was seen that the money of account had survived 
the storm. The community immediately began to resume 
trade with the old money of account. 

A similar thing occurred in the Southern States during 
the late war. When a pair of boots cost three or four hun- 
dred dollars, it seemed as if all previous ideas of the value 
of the dollar had been obliterated. But immediately after 
the close of the war, the money of account re-asserted it- 
self. 

In a reverse manner from that aforesaid, the money of 
account may be changed by a diminution of the amount of 
money in circulation. This has been going on for over ten 
years in Europe. The money of account in the various 
nations of that continent had been slowly formed from the 
average public judgment of values predicated on the use of 
both gold and silver as legal-tender metals. But since the 
demonetization of silver, the meaning of the terms, one 
franc, one mark, etc., affixed to the different monetary units, 
has been slowly changing. Hence a growing change in the 
money of account. But the ancient money of account will 
assert itself whenever silver is restored to its former right- 
ful position, and the necessary increase made in the 
amount of paper money. 

DOLLARS AND BUSHELS ARE GOVERNED ALIKE. 

A widely spread feeling exists that the value of money 
changes in such a mysterious way that no one can either 
predict what effect a given policy will produce, or explain 
events after they have occurred. But in fact the value of 
a dollar, no matter of ivhat material it is composed, is deter- 
mined by precisely the same principles that give value to 



298 



SOCIAL STRUGGLES. 



a bushel of wheat, a bushel of potatoes, or other valuable 
things. 

The value of a bushel of wheat depends entirely on the 
conditions in which it is placed. Chief of these conditions 
is the number of bushels for sale at a free market price, 
relative to the need and demand for those bushels. It is 
not the number of bushels in existeiice which decides the 
value of one bushel ; so long as the existing wheat can be 
hoarded and kept out of market, for the time, it is practi- 
cally destroyed. 

HOW MONOPOLY CAN CHANGE PRICES. 

The great speculative operations which have taken place 
during recent years in wheat, pork and other commodities 
have been based on the fact that whoever can control and 
keep from market, at will, a sufficient proportion of all, or, 
a very considerable part of a given thing, which exists in 
the world, thereby acquires, to a large extent, the power to 
change the value and the price of that thing. The success 
of such an operation depends chiefly on the completeness 
with which a given thing is thus monopolized, the length 
of time the hold can be maintained, and on the extent to 
which other things can come into use as substitutes for the 
thing withheld from market. 

MONOPOLY CAN CHANGE THE VALUE OF A DOLLAR. 

The value of " one dollar " depends on similar facts and 
similar principles to those which give value to bushels of 
wheat or barrels of pork. Other things being equal, its 
value is increased whenever the number of dollars for sale 
is diminished ; its value is diminished whenever the num- 
ber of dollars is increased. Combinations can be made to 
keep dollars from sale, just as combinations can be made to 
keep wheat, or other things from sale. 

Such combinations are made easier and more likely to 
succeed by the same causes which render " corners " in 
other things more easily successful ; viz., a diminution in 
the number of dollars, a diminution of the sources from 



CORNERING MONEY. 



299 



which they can be obtained, and a diminution of the 
number of persons who possess and control those dollars. 

MONOPOLIES IN CALIFORNIA. 

Before the construction of the Pacific railroads, Califor- 
nia was isolated from the sources from which many of the 
necessaries used by her population were derived. Con- 
sequently that State was famous for creating "corners " in 
various things. One man would buy all the bacon in the 
State and contract for all in transit thereto. He would 
then advance the price of bacon and make a fortune before 
the people could obtain supplies from another source. 

Another man would buy all the sugar ; another would 
control all the coffee, and another would buy all the Spices 
in the State. In this way the people of the State were 
plundered by monopolies rendered possible by the condi- 
tions under which that State was then placed. The open- 
ing of the railroads has put an end to the facility of these 
speculations. New supplies can more readily take the 
place of those withheld from market by speculators. 

MONEY KINGS WISH TO CORNER MONEY. 

California thus affords an explanation of the desire of 
the money kings of the world to limit the legal tender 
which the people must use. By restricting it to gold, and 
by placing the issue of paper money in the hands of a few 
bankers, it is made far easier for a combination of rich men 
to make a " corner " in dollars whenever they choose. 
With the mints open freely to both gold and silver, and 
the control of paper money taken out of the hands of 
the bankers, the people would then be as much safer from 
an injurious hoarding of money, compared with the pres- 
ent, as the people of California are now safer than for- 
merly from the hoarding of articles of food. 



300 



SOCIAL STRUGGLES. 



CREDITORS CAN BE ROBBED BY INFLATING THE CURRENCY. 

Let us now by examples show some of the practical effects 
of making great changes in the amount of money in circula- 
tion. In i860 A buys a farm in Georgia for $10,000. He 
pays $2000 down, and gives his note for $8000, secured 
by mortgage on the farm. The average price of wheat 
for several years has been $1.25 per bushel. The price of 
other things being in proportion to that of wheat. Said 
mortgage, therefore, at the time of sale of the farm, re- 
presents the value of 6400 bushels of wheat. War breaks 
out and an enormous issue of paper money takes place. 
The price of wheat rises to $25 per bushel. The mort- 
gage then represents the value of 320 bushels of wheat. 
The owner of the farm can then pay the mortgage with 320 
bushels of wheat. By the trick of inflating the currency, 
the seller of the farm has been robbed of the value of 6080 
bushels of wheat. 

HISTORY OF INFLATIONS. 

The history of all unlimited issues of paper money is sim- 
ilar to the story told in the foregoing example : viz., an 
enormous rise in prices ; robbery of creditors and derange- 
ment of industry. The history of our Continental currency 
during the Revolutionary War with England is substantially 
a history of all excessive issues of paper money. It re- 
mained at par with coin, until about nine million dollars had 
been put in circulation ; it then gradually depreciated with 
the issue of each successive and additional million until it 
finally became almost worthless. The unsuccessful attempts 
to use a public debt as currency all owe their failure to one 
cause, viz.: The amount of debt put in circulation as money 
was not limited to the actual needs of trade, on the basis of the 
existing scale of prices. 

The trade of a given nation, or community, daily trans- 
fers from one person to another a certain amount of labor 
and commodities. This transfer is more conveniently ac- 
complished by the use of a certain volume of value in the 



VALUE OF PAPER MONEY. ,OI 

form which we call "money." No matter of zvJiat material 
this money be composed, — no matter whether it be convertible 
into coin or not, so long as its volume does not exceed the quan- 
tity requisite for the convenient excliange of this value, it 
zvill perform all its functions zvithout depreciation. 

PAPER MONEY IS NOT HELPED BY WHAT IS " BACK OF IT." 

The idea that paper money derives its value from what 
there is " back of it " is a mistake. Paper money does not 
need anything " back of it " any more than a half bushel 
measure needs something back of it. It simply needs to 
be limited to the amount needed to carry on business. 
Further than that, " something back of it " is of no effect 
whatever. It makes no difference what guarantees of its 
payment may exist, nor how much wealth may be pledged 
behind it, whenever more money is permanently put in cir- 
culation than is requisite to conveniently effect the ex- 
changes of a certain locality, such money begins to depre- 
ciate ; — it generally remains nominally at par, its decline in 
value being shown by the rise in the price of commodities 
stated in such money. 

The idea that an unlimited issue of paper money can be 
safely made, if an equal or greater amount of property be 
pledged for its payment, is essentially the error which led 
France to issue assignats during the French Revolution. 

This notion has arisen from the idea that paper money is 
good only when it is " redeemed " in coin. Redemption of 
paper money in coin adds to its value 07ily so far as it limits 
its amount. Aside from that one purpose, it is as useless to 
"redeem " a paper dollar as it would be to redeem a gold 
dollar ; or to " redeem " a peck measure, or a yardstick. 
The efficiency of all schemes for the so-called " redemption ", 
of paper money is determined solely by the degree in which 
they maintain a uniform relative amount of paper money in 
circulation. 

It has been asked : If unlimited paper money produce 
such disasters, is not paper money more dangerous than 
metallic money? Yes; for the same reason that a locomo- 



302 



SOCIAL STRUGGLES. 



tive engine, unless in intelligent hands, is more dangerous 
than an ox team. The more powerful and efficient the 
agent, the more need of careful management. An " unlim- 
ited " horse runs away and does damage to the carriage and 
its occupants. " Unlimited " fire burns cities ; "unlimited" 
steam explodes boilers ; gunpowder will ignite and tear us in 
pieces — in fact, every useful agent or power is only useful 
when intelligently used. If we cease to employ things be- 
cause, if not regulated, they would inflict injury, we should 
at once discard steam, electricity, fire, water, and, in short, 
almost everything which helps to make civilization. We 
should return to primitive barbarism. 

INFLATION IS POSSIBLE WITHOUT ISSUING PAPER MONEY. 

Furthermore, there is nothing in the Constitution which 
prevents Congress from enormously inflating our gold and 
silver coins. It could be done by enacting a law that a ten- 
dollar gold piece should contain only fifty grains of stand- 
ard gold histead of two hundred and fifty-eight grains as at 
present. This always must be so, because the power to de- 
clare what shall be a legal tender is an attribute of sover- 
eignty, and must be lodged with the national legislature. It 
cannot be destroyed without destruction of the independ- 
ence and sovereign power of the nation. 

Inflation to-day is not prevented by law, nor by the use 
of metallic currency, but by the people having been edu- 
cated to abhor a change in the currency which robs one 
class for the benefit of another. Public intelligence and 
publicity of all proposed changes in the volume of money 
are the best safeguards against inflation. 

PAPER MONEY INFLATION A PRETEXT FOR CRIME. 

The fact that unlimited issues of paper money have in- 
flicted injuries on society in the past, has been used as a 
pretext to justify crimes on the community in a direction 
the opposite of inflation. A sketch of the practical opera- 
tion of one of these acts on a single individual will illus- 
trate their effect on a large portion of the community. 



ROBBERY OF DEBTORS. -503 

In 1872, B buys a farm in Pennsylvania for $10,000. In 
payment, he gives $2500 in cash and his note for $7500, 
secured by mortgage on the farm. Wheat in that vicinity 
has for several years been worth an average of $1.50 per 
bushel. The price of other articles in proportion to that 
of wheat. The debt of B thus represents 5000 bushels of 
wheat, or a proportional amount of other produce. 

In 1873 silver was demonetized. There was no petition 
for such an act, either by the people or by representative 
bodies. The voters never assented to it — it was never 
made a portion of a political platform. The whole affair 
was managed so quietly that very few persons knew anything 
about it until months after it had been done. It was not 
generally known until public distress led to inquiries as to 
the cause of hard times. 

The currency is thus contracted and prices fall. Gold is 
the sole metallic legal tender, and the demand therefor and 
its value are thereby increased. Taxes and interest are un- 
changed but the price of wheat goes steadily down from 
year to year until it reaches ninety cents a bushel. 

When B first got his farm he could pay the yearly in- 
terest on his debt with 300 bushels of wheat. It now re- 
quires 500 bushels to pay the interest. The whole debt 
could originally be paid with 5000 bushels of wheat, — but 
now it would require about 8383 bushels of wheat to pay it. 
Other produce has fallen in price as much as wheat, and B 
finds himself unable to pay the interest on the mortgage. 

B then tries to sell his farm, but finds that land has fallen 
in price so that no one is willing to pay the mortgage for 
the farm. B then goes to his creditor and offers to return 
the farm in payment of his debt, thus sinking the $2500 
paid down. But the creditor refuses to accede to B's re- 
quest. Finally the creditor forecloses the mortgage, gets 
back the farm, and, from an action on B's note, takes all his 
cattle and farming utensils which the law will allow him. 
Thus, B has lost several years' labor, many valuable im- 
provements made on the farm, the $2500 and most of his 
cattle and tools. 



304 



SOCIAL STRUGGLES. 



While this cheerful process has been going on, B has read 
in his newspaper that the hard times were caused by the 
Suez Canal, the Bankruptcy Act and over production : — that 
we have grown so rich as to make hard times, and that a 
few rascals wanted to have silver coined. 

NOT A FANCY SKETCH. 

That the foregoing example is not a mere fancy sketch 
many thousands of persons know from bitter experience. 
A vast number of persons have been reduced to poverty. 
Another multitude have spent the best years of their lives 
in industry and economy, without being able to pay any- 
thing more on the mortgages on their homes than the in- 
creased burden of interest thrown upon them by contraction 
of the currency. 

SUDDEN CHANGES IN THE CURRENCY PARALYZE BUSINESS. 

When the currency is undergoing either rapid and great 
inflation, or is undergoing rapid contraction, industry is par- 
alyzed. The principle which produces this industrial pros- 
tration is identical in both said cases ; viz., the capital, called 
money, whose function is to associate capital and labor, is 
deranged. The distribution of wealth is retarded. 

But the immediate source of trouble is precisely opposite 
in one case from the other. When inflation is going on so 
that no one knows if he sells goods to-day how much he will 
have to pay to replace them to-morrow, — people hoard their 
goods. When contraction is going on so that no one knows 
if he buys goods to-day whether they will not be lower priced 
to-morrow% people Jioard their money. 

For the past few years, money has been hoarded simply 
because it was increasing in value. When prices are stead- 
ily falling, holders of money prefer to either hoard it, or 
loan it on call with ample security. This has led to the ac- 
cumulation of large sums of money in our financial centers, 
and to its being loaned, on call, at one or two per cent, per 
annum. Thereupon it has been said : " While business is 



WHA T CHEAP MONE V /S. 



305 



depressed and prices low, there is an abundant supply of 
cheap money." 

WHY MONEY IS HOARDED WHEN PRICES ARE FALLING. 

The aforesaid talk about "cheap money" is a stumbling 
block over which many fall. But it is really a very simple 
matter. The fact that money can be borrowed at two per 
cent, per annum is no evidence whatever of the actual value 
of that money. The lender of money, on call, does not part 
with the ownership of the money, — he has not so/d his 
money. He has merely sold the teiiipora7'y possession of hjs 
money, and has taken what he deems ample security that 
the possession of the money shall be given back " on call." 

THE TRUE TEST OF THE CHEAPNESS OF MONEY. 

In order to ascertain whether money is " cheap," as al- 
leged, the proper way is to go into the market and endeavor 
to buy money : — that is, try to exchange other property for 
money. The same persons who tell us money is "cheap," 
say that prices are low. This cannot be. When two dif- 
ferent things are put in the opposite sides of evenly bal- 
anced scales, one side or the other must go down. One side 
is down and the other up. One side is low and the other 
high. When prices are down, money is up. When prices 
are up, money is down. Money is actually " cheap " when 
it is on sale at low prices — that is, when its absolute ozvner- 
ship can be boiigJit for a comparatively moderate amount of 
property or labor. In such case what we call " prices " are 
high. 

DIFFERENCE BETWEEN TEMPORARY POSSESSION OF MONEY 
AND OWNERSHIP OF IT. 

The owners of money, when the currency is contracting, 
are in the condition of the owner of a vacant lot in the cen- 
ter of a rapidly growing town. The value of such a lot is 
steadily rising. Its owner cares little who may have the 
temporary occupation of it so long as its ownership re- 
mains in his hands. He may be willing to lease it for 
20 



306 



SOCIAL STRUGGLES. 



three or five years at a very low rent, but this low rent 
does not prove that the lot is " cheap." It merely shows 
that its owner is so convinced that it will be worth more in 
the future than at present, that he prefers to temporarily 
dispose of \\.s possession instead of at once selling its owner- 
ship. 

Whenever the owners of money think it will be worth 
less in the future than at present, they make haste to sell 
their money ; that is, as far as they can, they exchange it 
for other property which they think will rise in price. It 
has constantly been said that the large amount of idle 
money in New York was due to " fear of inflation." If such 
a fear actually existed, the owners of that money would im- 
mediately seek to protect themselves by investing in prop- 
erty less liable to be harmed by inflation than money. 

The aforesaid considerations show that the hoarding of a 
large amount of idle money in New York and other finan- 
cial centers is a symptom that money is dear and steadily 
growing dearer. Some of the owners of the capital called 
money, which should be employed in associating other cap- 
ital with labor, and distributing the products, are lying in 
wait to see how much of previously created wealth they 
can obtain for their money. This conduct withdraws 
money from circulation just as effectually, for the time it is 
hoarded, as if it were destroyed. The contraction going on 
from other causes is thus intensified. 

If our currency were still more contracted, it would ap- 
pear more abundant and cheaper to the superficial ob- 
server than at present. Money would be rising in value 
faster than it now is. More money would then be lying 
idle, and the rate of interest on call loans would be lower 
than at present. When the purchasing power, and there- 
fore the actual value of money is increasing at the rate of 
ten per cent, per annum, whoever borrows money to be re- 
paid one year thereafter, must return to the creditor, not 
only whatever interest he agreed to pay, but a principal 
more valuable by ten per cent, than was originally bor- 
rowed. Consequently, if the currency is being contracted 



HOW BANKRUPTS ARE MADE. 



307 



enough, no one expecting to repay it would borrow money, 
even without any interest whatever. This would be so, "be- 
cause the rise in the value of the money would be more 
than the borrower could reasonably expect to make as 
profits out of the business in which the borrowed money 
was used. 

A MISTAKE IN DIAGNOSIS. 

The phenomena which are indicative of a contracted cur- 
rency, have been mistaken by those who " profess " a sci- 
entific knowledge of money for evidence of inflation. 
These persons and their followers have increased their 
clamor for further contraction just in proportion as the 
trade centers have become congested, the interest on call 
loans lower, and business and prices more depressed. 

When medical men were more ignorant than at present, 
many diseases characterized by a full, bounding and rapid 
pulse were supposed to arise " from the patient having too 
much strength and too much blood." On this theory, 
bleeding was the proper remedy. In this way, vast num- 
bers of persons have been brought at once " down to hard 
pan " beneath the sod. Physicians have slowly learned 
that such patients have neither too much strength nor too 
much blood. The circulating medium is unbalanced , and 
instead of opening veins and letting it out, they now take 
measures to restore its normal equilibrium and functions. 

In like manner, financial doctors, ignorant of the facts 
and principles involved, have mistaken the congestion of 
the circulating medium, produced by contraction, for symp- 
toms of too much money and too much wealth. In their 
minds, low prices and a great derangement and depres- 
sion of industry indicate " inflation and overproduction." 
There is no doubt that inflation can produce great pros- 
tration of commerce and industry. But this derangement 
of business is always, and necessarily, accompanied with 
abnormally high prices. Whereas the paralysis caused by 
contraction is always attended with low prices. 

Since contraction has been going on in this country it has 



3o8 



SOCIAL STRUGGLES. 



been repeatedly stated that multitudes of persons were 
made bankrupt because fear of inflation made capitalists 
refuse to help debtors with loans. Most bankrupts became 
such, not because they could not borrow more, but because 
they had already borrowed too much. They did not need 
more " borrowed money," — they needed more money of 
their own. They needed to be able to sell their goods, or 
their property, at a fair price; inability to do that, caused 
their failure. They were forced to exchange their goods 
for money dearer than the money with which those goods 
were bought. 

A TYPICAL WRITER. 

As a specimen of the prevalent ignorance on this topic, 
the following quotation is made from the Christian Union 
of Feb. 4, 1886. The Union is one of the so-called relig- 
ious papers which, steadily advocates the dominant ideas of 
Wall Street. 

" The gradual approach of Congress to the discussion of the silver 
question is felt and expressed in the reluctance of business men and cap- 
italists to enter into any new or larger enterprises until the policy of the 
Government with respect to silver has become settled. The various pro- 
jects offered in Congress illustrate the feeling that something must be 
done, if possible, to ease the burden which the radical silver men insist 
shall continue to be borne ; i. <?., a continuance of coinage of standard 
silver dollars. It is hoped that among these projects something will be 
found that can lighten the great cloud which otherwise will continue to 
overshadow the country. Confidence, it would seem, is ready to assert 
itself, but the utter doubt as to the issue of the growing agitation of the 
silver coinage question acts as a paralysis and holds all of our wealth- 
producing sources in absolute check. For this reason we find our banks 
again accumulating idle capital. At the close of last week there was a 
surplus reserve of over $35,000,000 in the New York City banks, repre- 
senting just so much distrust or doubt. This idle reserve is growing 
from week to week so that the money market rules about one and a half 
per cent, for money on call at the Exchange." 

The editor of the Union seeks to persuade his readers 
that the amount of idle money constantly increases because 
its owners believe the coinage of silver dollars will not be 



THE ACTUAL BELIEF. oqq 

stopped. He says; "Confidence is ready to assert itself." 
We ask : Confidence in what ? What feehng is it that in- 
duces men to prefer lending money at one and a half per 
cent, on call instead of investing it in business enterprises? 

The moment we drop visionary theories and use our com- 
mon sense, the answer to the above questions is obvious. 
The owners of the aforesaid idle money are guided by the 
same principles which influence the majority of other 
property owners. That is, they use their property in the 
way which they think will yield the greatest profit. Their 
conduct shows that they think it more profitable to keep 
their money under constant control than it would be 
to invest it in real estate, buildings, machinery, com- 
modities, or any other form of wealth. So much, no one 
will deny. 

The next question is : Why do they think as they evi- 
dently do? The Union imagines the owners of this idle 
money do not invest it in productive industry because they 
fear silver will continue to be coined, and the prices of ma- 
chinery, buildings and goods consequently rise. Just think 
of this proposition one minute. Do men refuse to invest 
in things which they think will soon command a higher 
price ? Is it not perfectly certain that, like all other per- 
sons, the owners of this idle money are ready to make a 
profit ? Is it not also certain, that these men would at 
once invest in productive business, if they expected a rise 
in the price of the property in which their money would be 
invested in such case? 

LACK OF CONFIDENCE IN PRICES IS THE REASON MEN 
HOARD MONEY. 

The editor of the Union would be right, if he completely 
reversed his ideas. Wealth is kept in form of money for 
the simple reason that there is want of confidence in the 
stability of prices. There is fear that prices zvill go still 
lower. There is a belief that money will rise in value and 
all other property fall in price. Whenever it is perfectly 
certain that the coinage of silver will be permanently con- 



3IO 



SOCIAL STRUGGLES. 



tinued, and the coined silver put in circulation by paper 
certificates, the owners of money will be guided by the 
same principles they are now. They will invest their prop- 
erty where it will bring the most profit, viz., they will 
change it from money into something they think will pro- 
duce more income. Hoards of idle money will be replaced 
by money in active circulation, prices will rise and " better 
times " will appear. 

EFFECT OF SLOW CHANGES IN THE AMOUNT OF MONEY. 

The foregoing are the chief symptoms when either infla- 
tion or contraction occurs rapidly enough to be perceptible. 
But inflation and contraction of the currency often take 
place so slowly as to be imperceptible except by comparing 
prices separated by long periods of time. In the end, 
prices reach the same point, no matter whether the change 
in the amount of money be very slow or comparatively 
rapid. But the effects of the change of price are modified 
by the fact that, in such case, other conditions can partially 
adjust themselves to the change. 

A rapid inflation of the money of a country is nearly as 
disastrous to the interests of that country as a rapid con- 
traction of it. But when the increase in the amount of 
money takes place very slowly, many good results flow 
therefrom. 

In society, organized as it mostly has been on the prin- 
ciple that each man should engage in competition for what- 
ever wealth he can get, with comparatively little legal reg- 
ulation of this struggle, the inevitable tendency is for 
wealth to accumulate in few hands. Some men have 
greater capacity than others to fairly get wealth. When 
this capability is united, as it frequently is, with cunning 
and unscrupulousness, the probabilities are greatly that 
such a person will obtain more wealth than is best for the 
rest of the community ; at least, such is the tendency. A 
diminution in the amount of money intensifies this ten- 
dency, because the value of loans, when they fall due, is 
constantly greater than when the debt was incurred. 



A SLOW RISE OF PRICES. 



311 



For example, a family with a hundred thousand dollars 
invested at six per cent, in 1809 could spend six thousand 
dollars every year, and find themselves in 1849 i'^ possession 
of property as valuable as two hundred and forty-five thou- 
sand dollars were in 1809. This would be their reward for 
keeping out of business. If, during that time, there had 
been a gradual increase in the amount of money, and a con- 
sequent fall in its value, this family would find their income 
gradually diminished in purchasing power; they would see 
their industrious neighbors growing richer while they grew 
poorer, and this would impel them to educate their sons 
and daughters to habits of industry instead of lives of 
fashionable idleness. A slow rise in prices by increasing 
the reward of labor, and thus stimulating productive indus- 
try, tends to increase the wealth of a nation. It tends to 
keep men from retiring from business as soon as they would 
if they could convert their property into money, loan it, 
and feel that they were not only receiving interest thereon, 
but that the principal was growing more valuable. This 
retains valuable ability longer in the service of society, and 
prevents enterprises from falling into inexperienced hands, 
thus wasting both capital and labor. It is also a great in- 
centive to industry on the part of young men — it makes it 
easier for them to rise from poverty to positions of wealth 
and honor. 

It is sound public policy to have the wealth of the nation 
in many hands ; to have the masses contented and inter- 
ested in the preservation of order and in whatever measures 
tend to advance the common interests. If the friends of 
the English financial system succeed in their plans, the 
amount of money will slowly diminish, because the demon- 
etization of silver will extend from one nation to another, 
until gold, except for small change, will be the sole legal 
tender throughout the world. This would tend to give an 
unfair advantage to capital, in the form of money, and to 
place the wealth of the world for the most part in compara- 
tively few hands. 

Whenever a large number of persons are poor, and with- 



312 SOCIAL STRUGGLES. 

out hope of anything better, they have little interest in the 
public welfare, and easily become dangerous to society* 
Such persons feel, that no matter what occurs, they have 
little to lose. 

WHAT WE SHOULD SEEK. 

The ideal condition is to have the value of money uniform 
from generation to generation, and the covetousness of able 
men placed under wholesome legal restraints. The inter- 
ests of the landlord and tenant, and of the lender and the 
borrower are not identical. The constant tendency of 
human selfishness is therefore to make RENT AND INTEREST 
the two chief forms by which capital lays labor under tribute, 
higher than absolute justice would sanction. The creation 
of a stable currency would be a long step toward an equi- 
table regulation of rent and interest. 

Uniformity in the value of money can only be obtained 
by making the dominant condition which gives value to 
money uniform. The NUMBERS of the unit of money, 
RELATIVE to the numbers of the units of all other valuable 
things, must be uniform. That is, an increased or a dimin- 
ished production and exchange of wealth should be simul- 
taneously accompanied with an increased or diminished pro- 
duction of the units of money. The numbers of " dollars" 
should perfectly reflect the aggregate numbers of all other 
commercial things. The production of money should keep 
even pace with the creation of all other products of labor. 



CHAPTER XIL 

Alleged Causes of Hard Times: The Real Causes are not usually 
Assigned. — Actions are more Trustworthy than Words. — No Lack 
of Confidence in Silver Dollars. — The Confidence Cry. — The Bank- 
rupt Law did not make Hard Times. — -Overproduction. — What 
Production is. — Tendency of Poverty. — Tramps. — Capacity to La- 
bor is a form of Property. The Farmers and Overproduction.^Who 

are Benefited by Falling Prices. — London and New York are the 
Chief Authors of the Cry " Overproduction." — A Temporary Cure 
of " Overproduction." — Great Changes in the Amount of Money in 
Circulation Destroy Wealth. — When a Thing has the Greatest 
Value. — What each Person should Possess. — Examples of Destruc- 
tion of Value. — Report of an Embassy from China. 

No matter Jioiv imich distress among the laboring classes 
is caused by bad financial legislation, they seldom complain 
of fliictnating money ; the actual source of tJieir misfortune is 
not usually recognized. 

During the years of business depression which have oc- 
curred since 1872, various things have been assigned as 
causes thereof. Some of these allegations, in all probability, 
were originally put in circulation by persons who knew 
better, for the express purpose of diverting the attention of 
the public from the real source of their troubles. But as 
they have been generally believed, some examination of 
them should be made. 

The first allegation was • " The greenbacks make all the 
trouble. There is no confidence in the greenback. De- 
stroy the greenbacks and the hard times will be over." 

Human nature is unchanged. If men feared inflation, 
they would act as history shows us men have always acted 
whenever they lost confidence in the value of their money. 
They would at once seek to exchange the suspected money 
for something which they thought had more permanent 
value than the money itself. They would not eagerly seek 
possession of what they had no confidence in. 

313 



214 SOCIAL STRUGGLES. 



ACTIONS ARE MORE TRUSTWORTHY THAN WORDS. 

Moneyed men have said they were afraid of inflation, but 
what a man says is of no account so long as his conduct 
shows that he does not believe it himself. Capitalists are 
mostly men who look out for their own interests pretty 
shrewdly. Personal property of all kinds and real estate 
were very low, when the cry, " No confidence in greenbacks," 
was at its height. If there had been fear of inflation, cap- 
italists would have bought land or personal property in 
order to secure themselves and get the benefit of the rise 
in price which they knew would take place under inflation. 
The result would have been a brisk demand for commod- 
ities and real estate, and a consequent rise in their price. 
But nothing of this kind has happened. Capitalists have 
sought greenbacks, or personal property readily convertible 
into greenbacks, and this shows what they have really be- 
lieved. Men do not eagerly desire things in which they 
lack confidence. During all this time. United States 
bonds, expressly payable in currency, have been higher 
than the bonds payable in coin. 

NO LACK OF CONFIDENCE IN SILVER DOLLARS. 

Lately, it has been said, that the hard times are due to 
want of confidence in the silver dollar. But the owners of 
those dollars have not shown any anxiety to exchange 
them for real estate, machinery and the various other kinds 
of property. The same facts which show that there has 
not been a want of confidence in the greenback are true in 
regard to the silver dollar. England has no silver dollars ; 
but her business is more depressed than ours. In fact, 
there has been for years want of confidence in the mimber 
of dollars which any kind of property, real or personal, 
would sell for. In other words, all classes of persons have 
felt no confidence in their ability to judge to what extent 
the currency would be contracted. Business has not re- 
vived because prices were falling. As the demonetization 
of silver by Germany, the United States, and several other 



CAUSE OF SPECULATION. 



315 



nations, created new and untried conditions, no one could 
tell how far prices would fall. 

Manufacturers have been unable to sell their goods at a 
profit because the contracting currency steadily lowered 
prices. Business men will eagerly push forward whenever 
they think contraction has ceased ; or, in other words, 
whenever business can be done without danger that goods 
will have to be sold for less than first cost, rent, rlerk-hire 
and other expenses. 

THE CONFIDENCE CRY. 

When a person proclaims that " confidence " is all that is 
needed to restore good times, it is sometimes well to ask 
him : Confidence in what ? The majority of such persons 
imagine that '* confidence " in the cessation of silver coin- 
age and the still further lowering of prices would revive 
business ! If such persons had their way. What next would 
they want confidence in ? 

The opening of the Suez Canal and a large number of 
railroads have been assigned as a cause of hard times. If 
an increase in our facilities for transportation cause hard 
times, then all labor-saving machinery is a detriment. 
Ignorant mobs have frequently destroyed labor-saving 
machinery simply because they were thoughtless. Rail- 
roads and every other labor-saving invention facilitate the 
creation of wealth, and thus tend to make better times for 
the human family. The men who attribute the hard times 
to railroads are those who positively told us that the green- 
backs made all the trouble. In the spring of 1878, the same 
persons were predicting universal ruin in case the silver 
bill became a law. If our superior modes of transportation 
have plunged millions of people into dire financial distress, 
we had better fill up our canals, destroy our railroads, and 
return to the primitive ox-cart. 

We have undoubtedly built more railroads than were 
needed. In many cases, railroads have been built, not to 
benefit the section of country through which they pass, but 
to help the men who built them. There has been a lack of 



3i< 



SOCIAL STRUGGLES. 



judgment shown in building railroads. It is true that 
the capital and labor used in building a railroad not needed, 
are wasted. But this loss does not materially affect the 
value of that form of capital called money, which is always 
deranged in its workings whenever business is depressed. 

Many persons have ascribed railroad speculation to the 
existence of greenbacks. But to say that selfishness, want 
of discretion, and lack of judgment, are due to greenbacks 
is as unreasonable as to attribute the yellow fever to the 
gold in the Treasury. Human infirmities existed before 
paper money was invented. 

The idea that railroad manias are prevented by " gold 
payments " is utterly fallacious. Those who embrace it 
forget that England had " gold payments " in 1844, 1845, 
and 1846, and during that time she squandered large sums 
in a wild railroad speculation. The historian, Smiles, in 
speaking of that period, says : 

" Speculators were left at full liberty to project and carry out lines 
almost parallel with those of existing companies. A powerful stimulus 
was thus given to the existing spirit of speculation which rose to a fear- 
ful height in 1845, turning the whole nation into gamblers." 

Speculation is a natural tendency of human nature and 
Cannot be prevented by any kind of currency whatever. 
Speculation has for its parents : Desire for gain, and 

" Hope that springs eternal in the human breast." 

Bad financial legislation, distress, and disaster may smother 
it for a short time, but it will reappear in spite of calamity 
and misfortune. To stop it would be to suppress the virt- 
ues of courage and energy, and, in short, to change the 
constitution of the human mind. 

California illustrates the mistake of supposing that "hard 
money " generates business conservatism, while paper money 
creates speculation. That State has always had a gold cur- 
rency, but no place has been the theater of more and crazier 
speculations. She has steadily had speculations in real es- 
tate, grain, mines, merchandise, and, in fact, in almost 



EFFECT OF THE BANKRUPT LAW. ^I? 

everything which can be bought and sold. Those who 
think gold a remedy for speculation should visit San Fran- 
cisco when business is " lively." They would then see a 
crowd acting like a lot of madmen, and would probably be 
cured of that delusion. 

THE BANKRUPT LAV^ DID NOT MAKE HARD TIMES. 

Prior to its repeal, it was widely proclaimed that the Bank- 
rupt Act caused the hard times. It was said that such a law 
enabled persons to escape payment of their debts. It was 
forgotten that when a man has not enough property to pay 
his debts, he always " escapes " payment. The bankrupt 
law took all the debtor had ; it is difficult to see how he 
could surrender more. The immense number of persons 
forced into bankruptcy were a result of the hard times, not 
the cause of them. Attributing hard times to the bankrupt 
law was as rational as to ascribe changes of temperature to 
thermometers. Bankruptcies are symptoms, not original 
causes. 

The same persons who clamored for the repeal of the 
bankrupt law, as a remedy for the hard times in 1876, de- 
manded its re-enactment in the hard times of 1884. 

Bankrupt laws simultaneously sponge out all a debtor's 
property and debts. He can then start anew with legal se- 
curity that his very first earnings and savings will not be 
seized as part payment of a debt so large that the interest 
alone renders its payment hopeless. By thus lifting men 
out of despair and giving them an incentive to industry and 
economy, bankrupt laws preserve to society much valuable 
service which is lost when no hope exists of ever peacefully 
owning and possessing property. It is no benefit to soci- 
ety to oblige a man to do business in some one's else name, 
or practice some kindred subterfuge in order to earn a liveli- 
hood. 

OVERPRODUCTION. 

Next to the idea that we have too much money, the cause 
of hard times most frequently alleged is " overproduction." 



T I g SOCIAL STRUGGLES. 

Manufacturers and merchants have had on hand more goods 
than could be sold except at ruinously low prices, and this 
has led to a belief that we have "too much of everything," 
and therefore suffer from hard times. 

The minds of many have been confused on this subject,, 
by the fact that while it is impossible to produce too much 
of all kinds of wealth, we can produce too much of a very 
few kinds, and thus create a glut in the market for a short 
time of those particular things. In other words, produc- 
tion may be to a small extent misdirected, temporarily. 
But misdirected production soon cures itself. Manufact- 
urers could make more plows than were wanted, but they 
would then divert part of their force to making other kinds 
of tools, so that mistakes of that kind soon pass away with- 
out serious detriment to society. At some times and 
places the supply of certain goods may be either in excess or 
deficient, but when the social forces are not deranged by 
pernicious legislation these irregularities work their own 
remedy in a short time without producing material disturb- 
ance of industry. 

WHAT PRODUCTION IS. 

Production is a term used to define the creation of wealth ; 
the manufacture of those things which supply man's neces- 
sities, comforts and desires. Therefore, discoveries in 
science and inventions in art are not a curse, but a blessing. 
Every new labor-saving device, or machine, should be 
hailed as a friend whose benefactions rightfully belong to the 
whole human family. If new inventions cause overproduc- 
tion and overproduction cause hard times, inventions 
ought to be stopped at once. Let us go back to a system 
when there was less invention and less wealth. 

But in fact, we have not now, and never have had too 
much wealth ; we have not too many houses, too much fur- 
niture, too much food, too many cattle and too much labor- 
saving machinery. We hear no complaints of that kind. 
People complain of poverty — not of wealth. A great deal 
has been said of the " blessings of poverty." But most of 



WHA T PO VERTY USUALL V DOES. 



319 



US are so unselfish that we are wilhng to resign our propor 
tionate amount of such a "blessing" and surrender its 
enjoyments and advantages to other persons. 

Prominent men have told us that we have too many- 
laborers ; that we have improved too many farms ; raised 
too much farm produce ; made too many goods ; and 
opened too many mines. If that be so, then we have been 
too industrious ; we have not enough drones and parasites ; 
and, as a result, we have grown so rich that we are poor and 
distressed ! 

TENDENCY OF POVERTY. 

A few individuals may be richer than is best for them, 
but mankind on the whole are in no danger of becoming too 
wealthy. If poverty be a good thing to improve mankind, 
the pauper quarters of great cities should be the best and 
happiest, as they have the greatest amount of this 
"heavenly discipline." The statistics of crime tell us a dif- 
ferent story. They show that crime increases in the same 
ratio that a nation or a locality is impoverished. The temp- 
tation to do wrong is increased, and the will-power to resist 
temptation is weakened, by want. Thousands of mechanics 
are sober and reputable citizens as long as they have 
employment at fair wages. But when idle and poverty- 
stricken, they are unable to withstand the accompanying 
depression of spirits, and seek refuge in the rum shop to 
drown their misery in still lower depths. Wise Benjamin 
Franklin said : " It is hard for an empty bag to stand 
upright." 

Poverty has a tendency to deteriorate the physical, intel- 
lectual and moral condition of an individual, a community, 
or a nation. Poverty narrows a man's sources of intellect- 
ual recreation ; it diminishes his physical comforts ; it low- 
ers his self-respect ; it breeds discontent, misery and crime. 
History teaches that it is almost impossible to elevate the 
moral or intellectual position of a people without first im- 
proving their material condition. 



320 



SOCIAL STRUGGLES. 



TRAMPS. 



The "tramp problem," which has been such a mystery to 
many, is the old, old story ; it is the logical and inevitable 
result of creating such changes in contracts by legislation as 
to derange the capital used in associating labor and capital ; 
and, consequently, impoverishing a considerable portion 
of the population. 

Those who are weakest in mental and moral resolution are 
most liable to succumb first to the pressure of hard times ; 
they become discouraged, lose self-respect, feel embittered 
and thus become tramps. Many of those who favor a law 
which makes poverty a penal offense would soon become 
tramps themselves if their property and means of livelihood 
were taken from them. In fact, some of the fiercest denounc- 
ers of tramps have never earned a dollar in their lives by 
honest productive labor, but live on means inherited from, or 
created by others. Essentially they are paupers themselves, 
because they have never been self-supporting ; have never 
contributed to society as much as they have received from it. 
The world does not " owe a living " to idle persons. Sound 
morality requires that all who are physically able to earn 
their own living should do so. 

The derangement of the money of the country, the 
machinery of distribution, is shown by the stoppage of 
mills and factories. This is because thousands of people 
in bitter need of goods have either been out of employment, 
or have been working at such low wages that they have not 
money to buy them. There is no propriety in saying there 
are too many boots and coats in the world, when, at the 
same time, the number of persons in need of boots and 
coats is greater than in times when nothing is said of over- 
production. But there is good sense in saying that the 
machinery by which boots and shoes are distributed is not 
working smoothly when multitudes of persons, willing to 
work, are in enforced idleness and obliged to go without 
boots, coats and many of the comforts of life. 



IV/-/V THE FARMERS HAVE SUFFERED. 32 I 

CAPACITY TO LABOR IS A FORM OF PROPERTY. 

Whenever the production of any of the forms of wealth 
be either wholly or partially suspended, that event necessarily 
implies the throwing out of employment of one or more 
persons. The capacity to labor is a species of property. 
But it is the most perishable of all kinds of property. It 
is destroyed by the passage of a day. Therefore, when a 
man possess only that kind of property which is com- 
posed of a capacity to daily perform some useful service to 
society, he loses all his means, — all his property has gone 
to waste every day of his idleness. Consequently his power 
to buy and use his fair quota of the various forms of wealth 
is destroyed. This diminution of the property of an idle 
man lessens his consumption of the wealth produced by 
other men, and still further contributes to retard the distri- 
bution of wealth. What is childishly called " overproduc- 
tion " then exists, and charlatans clamor for an increase of 
the very conditions which cause it. 

THE FARMERS AND OVERPRODUCTION. 

During recent political campaigns in which the pro- 
priety of making gold the sole legal tender was advocated, 
the farmers were told that gold payments would raise the 
price of their crops. The argument was that the price of 
wheat, beef, pork, and cotton was then fixed in gold in 
Liverpool — ^that gold had a " fixed value, " and that there- 
fore prices of farm products could not decline ; but that 
the prices of most goods consumed by the farmer would 
be cheaper, as the farmer would have the gold for his grain 
to buy them with, and would thus save the gold premium. 
But events have shown that gold payments have produced 
an enormous fall in prices of farm products, and now many 
of the papers talk about an " overproduction " of pork, corn, 
wheat, and similar things. 

The " overproduction " of farm products is merely this : 
their price, like that of everything else, depends largely 
upon the amount of money in circulation, — that has been 
21 



322 SOCIAL STRUGGLES. 

diminished and therefore prices have fallen. The price of 
farm produce has fallen in Liverpool just as it has here; 
and for precisely the same reason. The American demand 
for gold has increased the demand for gold in Liverpool ; 
this has made gold relatively scarce and dear, and as a result, 
the prices of farm products have fallen in Liverpool, 

The farmer who sells cheese must now milk more cows, to 
obtain the same amount of gold that he did before 1872. 
In like manner, the cotton planter must raise more cotton, 
the wheat grower must raise more wheat, and he who sells 
pork must raise more hogs. In short, more of all kinds of 
farm products, on the average, must be given as the price of 
25 8-10 grains of gold, 

WHO ARE BENEFITED BY FALLING PRICES? 

The question naturally arises : Who receive the benefit of 
this additional amount of produce which the farmers now 
raise to get the original amount of gold ? The answer is 
self-evident : It is those who own the same number of 
dollars they did when each one would buy less farm prod- 
uce than at present. The owners of bonds, mortgages 
and other forms of indebtedness, and those who have sub- 
stantially fixed salaries are the persons for whose benefit 
the farmer raises more produce for the same money. The 
cry of " overproduction " always arises from those classes. 

LONDON AND NEW YORK ARE THE CHIEF AUTHORS OF 
THE CRY "OVERPRODUCTION." 

England has heretofore been the greatest creditor nation 
on the globe. England originated the gold policy. The 
cry, " overproduction," has been heard in England more 
than in any other country. If too much wealth is produced 
in England, how is it that hundreds of thousands of her 
people are homeless and constantly on the verge of star- 
vation? 

New York is the greatest creditor city of this country. 
New York is the fiercest advocate of a currency exclusively 



WHEN A THING- HAS GREATEST VALUE. 323 

of gold. New York raises the cry of " overproduction " 
more than any other American city.* 

A TEMPORARY CURE OF "OVERPRODUCTION." 

We have seen that the morbid condition which persons, 
either ignorant or designing, call " overproduction " is 
usually treated as absurdly as the old plan of withholding 
water from patients consumed with fever. How then is a 
temporary cure of what is called " overproduction " usually 
brought about? 

Simply by changing the amount of business and scale of 
prices relative to the amount of money in circulation. The 
amount of money in circulation is diminished, but the busi- 
ness to be done with it is diminished still more. After 
twenty-five thousand business men have been made bank- 
rupt, they need less money than before, and the amount 
of money is thus relatively increased. After prices are re- 
duced below the level they have stood for a long time, a 
smaller amount of money will serve to exchange the same 
amount of goods. When a smaller number of men are at 
work, and those at work get lower wages, it requires less 
money to maintain such an industrial organization, than 
when all are at work at good wages. 

Commercial and industrial equilibrium are thus restored 
by a destructive and costly method. In fact, an industrial 
war burns over the country ; and a vast amount of created 
wealth, and of possible energy in form of willing labor, is 
destroyed in the process, and this is what is called " scien- 
tific financiering." 

* A false, absurd theory once fully lodged in the minds of a majority 
of mankind has a marvellous vitality. Over sixty years ago, Lord Wel- 
lington told the suffering laborers of England w^ho were clamoring for 
bread, that their troubles all arose " from raising too much wheat." 
Quite recently, the Emperor of Germany made a speech in which the 
business depression which has existed in that country since the demon- 
etization of silver was alluded to. Like the Duke of Wellington, the 
Emperor thought " overproduction " the cause of all the industrial 
derangement. 



,24 SOCIAL STRUGGLES. 

Suppose a farmer have eight sons and land enough by his 
method of farming to furnish four of them with employ- 
ment. Further, suppose that instead of adopting wiser 
and better modes of cultivating his land, or instead of di- 
versifying the employment of his sons, he should set them 
to fighting until only four were left alive. The above case 
would be similar to the present plan of maintaining our 
social system in existence by frequent industrial wars known 
as periods of " overproduction " and " hard times." 

GREAT CHANGES IN THE AMOUNT OF MONEY IN CIRCU- 
LATION DESTROY WEALTH. 

It is commonly supposed that sudden changes in prices 
and alterations in contracts made by legislation, while they 
take property from one class of persons and give it to 
another, do not actually reduce the total amount of Value 
in the country. Recent changes in the ownership of prop- 
erty have been styled by prominent economists, " a redis- 
tribution of wealth." That is, legislation has taken wealth 
from one class and given it to another. The plain truth is 
that a man when committing burglary is engaged in " re- 
distributing " wealth. But, in fact, such legal robbery does 
not merely transfer property from one man to another ; it 
diminishes the total amount of value in the country. There- 
fore it should be called a partial destruction of wealth by 
rascally laws. 

WHEN A THING HAS THE GREATEST VALUE. 

We have heretofore found that the value of a thing ,o a 
man depends entirely on the circumstances and condition in 
which that man is placed. Consequently, a thing has its 
highest value, when in the possession and ownership of a 
man whose wants and capabilities are exactly supplied by 
that thing. Its lowest value exists when owned and pos- 
sessed by a man who has no use whatever for it, and has no 
capacity to put it to good use. Between these two extremes, 
a thing may have various degrees of value. A woolen mill 
is far more valuable to a man who understands its manage- 



HOW VALUE MAY BE DESTROYED. 325 

ment, than to a person familiar only with running a steam- 
boat. A chemical factory may be valuable to one skilled in 
the manufacture of chemicals, and of very little value to a 
farmer. Dental instruments would be of little use to a black- 
smith. Numberless similar examples could be given. 

WHAT EACH PERSON SHOULD POSSESS. 

The tendency of society under proper organization and 
conditions is for each person to become the possessor of 
that kind of property which his peculiar, natural, or ac- 
quired abilities make him best fitted to use and manage to 
the best advantage. Not only the kind of property which 
a man shall own is thus regulated, but the amoinit of certain 
kinds of property which can advantageously be possessed 
by different persons, also tends to such self-regulation, when 
just principles govern. 

When the various forms of wealth in a country have been 
more or less perfectly adjusted to fit the special wants of 
individuals differing widely in both natural and acquired 
capacities, a forcible dislocation of the distribution of this 
property inevitably destroys, in greater or less degree, the 
relations and conditions which give value to different 
kinds of wealth. 

AN EXAMPLE OF DESTRUCTION OP VALUE. 

For example, here is a man engaged in the business of 
bending wood for the manufacture of carriages and other 
similar purposes. He owns a factory fitted up with machin- 
ery specially adapted to the purpose of bending wood and 
good for nothing else. A lawyer holds a mortgage on that 
factory for about half its value to the wood-bender in pros- 
perous times. Suppose the industries of the country are 
deranged, by considerably contracting the currency. The 
wood-bender,^ unable to sell his wares, fails to pay the inter- 
est on the mortgage. The mortgage is foreclosed and the 
lawyer becomes the owner of the factory. The wood- 
bender, impoverished and discouraged by the uncertainty of 



326 



SOCIAL STRUGGLES. 



mechanical business, goes west on a farm. The factory 
stands idle. 

In the above case there has been an actual destruction 
of value, and not merely a transfer of value from one man 
to another. Like all other values, the value of the factory 
and machinery were not intrinsic or inherent, but depended 
on conditions, — on their being in the possession and manage- 
ment of some one with industry and skill to properly man- 
age them. When these conditions were destroyed, a con- 
siderable portion of the value of the machinery and build- 
ing was also destroyed. 

Suppose two farmers live near each other and each one 
has work on his farm enough to employ four horses. One 
lends the other money in good times, and in hard times 
takes all his debtor's horses for the debt. The creditor has 
then eight horses, and has use for only four of them. Part 
of the value of the four horses taken from the debtor is 
destroyed, because their usefulness is impaired by the 
changed conditions. 

If value, as commonly supposed, were an intrinsic qual- 
ity, such changes of value as occur, by reason of unfortu- 
nate changes in conditions and circumstances, could not 
take place. As a matter of fact, values are often enor- 
mously changed by changes in the circumstances surround- 
ing a thing. In some cases the effects of changes are 
greater than in others ; but, in all cases whatsoever, a mate- 
rial change of conditions necessarily involves more or less 
change in value. Thousands of examples similar to those 
aforesaid could be cited to illustrate the fact that forcible 
transfers of property not only often consummate a gross 
wrong but usually are an actual destruction of a portion of 
the value of the property thus transferred. 

An immense number of mortgages have been foreclosed 
during the past ten years. In the great majority of these 
cases, the value of the property so transferred shrunk in 
consequence of its not being as well adapted to the wants 
of its new, as of its original owners. But this has been 
trifling compared with the destruction of values which 



WHAT THE CHINESE WOULD THINK. 327 

would have inevitably occurred if the wishes of the bankers 
and "scientists" had been gratified by destroying the 
greenbacks, refusing to coin silver, — thus making gold 
the sole legal tender, and still further contracting the cur- 
rency. 

REPORT OF AN EMBASSY FROM CHINA. 

While the nation is suffering to a serious extent from 
what is often called " overproduction," suppose an embassy 
should arrive in this country from China charged with the 
duty of studying our " scientific," monetary and social cus- 
toms and ideas and reporting the ascertained facts to the 
Chinese Government. In substance, a portion of such 
report would read as follows : 

" We landed at a port called New York. This, we were told, is the 
most populous and the richest city in the whole land. As our informants 
told us New York had more wealth than ten vast provinces, which they 
here call States, we wondered how it would seem to walk through a city 
where there was so much wealth and no one was poor. Soon after our 
arrival we had the honor of being invited to dine with some of the princes 
of New York. We were utterly amazed at the display of wealth made 
at these feasts. They were not held, as in China, in the day time, but at 
night. Soon after dark appears to be the middle of the day with the 
princes and queens of high rank in this wonderful country. These high 
dignitaries have beautiful palaces, elegant dresses, and such a multitude 
and profusion of dishes that the greater part of the dinner was simply 
soiled and wasted. This we thought would be lamented in China, but 
in this plentiful country where there is so much wealth, and too much of 
everything, we supposed it made no difference how much good food was 
thrown away. 

" At first we passed our time in the palaces of this great city, and con- 
versed with the great men, who told us many strange and interesting 
stories about the way too much wealth of all kinds was produced in this 
country. But we finally walked abroad to see for ourselves some of 
these wonders. We had been told ' there was too much of everything,' 
and, as we had never heard of such a thing before, we wanted to see 
how it seemed and learn how it could be. To our surprise, we soon saw 
great numbers of persons who appeared to be very poor. To make sure 
of this, we followed some of these persons to their homes and found that 
multitudes of mechanics and artisans were crowded into one poorly 
furnished house. We asked why they lived so, and found them truly too 



328 



SOCIAL STRUGGLES. 



poor to hire more commodious quarters. When we got back to the pal- 
ace where we stayed, we sent for some of the wise men and asked why- 
more houses were not built so as to have room enough to give every one 
a decent home. But the wise men told us the great trouble was that 
there had been an overproduction of houses and there were too many 
already. This seemed very queer to us. 

" 0.n our next walk we found that many workmen complained of not 
being able to get sufficient food for themselves and families. When we 
asked the wise men how this could be, we were told that bread was so 
hard to get because so much land had been cultivated and the crops had 
been so abundant that there was too much grain in the country, and that 
made it bad for poor people. 

" We next inquired why more of this surplus grain had not been ground 
into flour to make bread for the hungry laborers. Then the wise men 
told us that the poor people found it difficult to get flour because too 
much flour had already been made, and so the surplus flour made it hard 
to get bread. 

" It puzzled us very much to find things so different in this country 
from what they are in China. Upon further inquiry how it could be that 
the artisans were in want when there was too much flour, we were told 
it was because they were not at work, and so had no money tO' pay for 
bread. 

" We then asked if everything were finished, and if there were nothing 
more to be done in this country, and found that a multitude of enterprises 
were clamoring for some one to complete them. But we were told that 
the workmen were without work because the money with which their 
wages were paid was too abundant. It amazed us to find that the reason 
the laborers were without money was because money was too plenty. 

" We talked with the chief money changers of the city and asked 
why it was that the plentiful money was not used to hire idle men and 
set them to work. We were told there was plenty of idle money, but no 
one would hire it to carry on business with unless he was already in bus- 
iness and was obliged to keep on. This also seemed very curious to us, 
and we were still more surprised when told that men did not borrow 
money to start new business with because the rate of interest was so low. 

" We then asked if men did not borrow money because the interest 
was too low, why the money changers did not raise the rate of interest > 
Thereupon, the wise men laughed at us and said, if times grew much 
worse, business men would not borrow even if no interest were asked for 
use of the money. This left us more perplexed than ever, because in 
China men find it easier to pay a low rate of interest than to pay a high 
rate. 

" The news in all the public prints was that merchants in great num- 
bers were unable to pay their debts and were becoming bankrupts. 



VERY CURIOUS THINGS. 



329 



This we asked the wise men about, and were told that merchants failed 
because they could not borrow money to carry on their business, and that 
too much money in the country made this trouble. In China, when 
money is plenty, merchants who want money do not borrow ; they sell 
their goods and get money of their own. We wondered why the mer- 
chants of this country did not do as our own merchants do. But we 
finally learned that they did not sell their goods because no one would 
buy them. We found that the people did not wish to exchange the 
money of which they had too much for the goods of which they had too 
little. This is so contrary to anything which happens in China that we 
can find no way to explain it. 

" In hopes to learn some way of understanding the many curious 
things which are continually happening in this strange land, we journeyed 
to a great city in an interior province on the shores of a fresh-water sea. 
This city is named Chicago, and is called a great place for distributing 
wealth. So we expected to find that wealth had been distributed to every 
one. But we were surprised to notice, on our first walk through the 
streets, a crowd of ragged workmen, some of whom were barefooted. 
As the weather was not warm, we felt sorry for these men, and wondered 
how in such a rich place, where there were so many goods, these things 
could be. 

" The great scholars of Chicago told us the workmen were ragged be- 
cause there was too much cloth in the country When we inquired why 
this cloth had not been made into garments for poor people, we found 
that great trouble had arisen because so many clothes were already made 
up and could not be sold. This, we were told, was because machinery 
now made cloth and clothes so rapidly that there was too much clothing 
in the country. We also found that many natives of this extraordinary 
country went barefooted because there was too much leather, and too 
much machinery whereby boots and shoes were made in too large 
amounts. 

" At night we saw many persons in the streets begging for a warm 
shelter, and complaining that they had not enough blankets to keep them 
warm. Then we studied the learned magazines, books, and newspapers 
of this wonderful land and learned that this was because the warehouses 
and shops were overstocked with blankets. We also learned that a 
-great supply of a thing always forced multitudes to go without that plen- 
tiful thing. As people in China get abundant things more easily than they 
do scarce things, this amazed us very much. 

" We next journeyed among the farmers, and heard sad complaints 
that they were unable to pay their taxes and other debts, and buy the 
cloth, sugar, tea, and other things wanted in their houses. The farmers 
told us that this hardship was because the men in the villages and cities 
to whom they sold their produce paid such very low pricer. for it. Upon 



330 



SOCIAL STRUGGLES. 



going to dealers in farm products, and inquiring why such a fact existed, 
we were told that several great scholars from a high school of learning, 
had been in that province and stated that the low prices of farm produce 
were caused by too much money. Now, in China, produce is always 
high priced when money is plenty, and low priced when money is dear 
and scarce, and so we were once more bewildered by the events taking 
place in this extraordinary country. 

" We next traveled to a great smoky city called Pittsburg. There we 
saw great numbers of idle laborers who bitterly complained of lacking 
the necessaries of life, and among other things, said they were suffering 
from cold. This made us think that provisions and fuel must be scarce 
in that province. We asked the workmen why they suffered, and some 
of them said it was because the convicts in States' prisons were kept at 
•work. These workmen thought if the convicts were supported in idle- 
ness it would be better for the laborers whose toil would feed the con- 
victs. 

" But the chief rulers of the city soon informed us that the true reason 
for the sufferings of the workmen was because too much coal had been 
mined, and so the laborers had to suffer for want of fuel. These learned 
men also told us that too much beef, pork, and flour were in the ware- 
houses, and that this made the workmen great distress. As the work- 
men in China have plenty to eat when there are plenty of provisions in 
the land, and plenty of fuel when coal is plenty, this also seemed very 
queer and difficult to explain. 

" We have vainly traveled over much of this strange land in search of 
some way to explain the things which happen therein. Nearly everything 
here seems exactly the opposite of what it is in China. So much is this 
so that we have begun to reason directly contrary to the way we reasoned 
in China. Whenever a thing becomes very plenty in this country, it im- 
mediately becomes very hard to get. And when things are scarce, it is 
very easy to get them. When a man in this nation becomes very pious, 
it is taken as a sure proof that he is a knave and a cheat. When a man 
calls himself ' a patriot,' it is considered evidence that he is trying in 
some way to defraud his country. And we find that in this country a 
' benevolent man ' is a person who gives for charitable purposes a small 
portion of the property he has defrauded other persons of. 

" In order to be able to tell our countrymen how these strange things 
come to pass, we have diligently studied the books and have talked a great 
deal with the princes and the learned men of this marvellous nation. And 
among other efforts to understand these curious things, we have talked 
with a class of people which is quite large, and whom the natives call 
'statesmen.' These statesmen got their name because they are men 
who are constantly planning to live on the State ; so the natives call them 
statesmen. These wise and distinguished persons told us that the 



WHAT A SCHOLAR IS. ,31 

present amazing condition of things did not always exist in this country, 
but that it often accidentally happened. 

" Then we tried to find out what kind of an accident occurred to 
create such curious facts, but no one could tell us. They all thought 
something had happened, but what it was no one knew. Why too much 
of everything existed at one time and not at another, we could not 
learn. 

" Next, we asked the statesmen why the rulers of the land did not order 
the destruction of the surplus wealth that caused such distress among 
the poor people. We tried to learn why the flour, meat, buttfer, cloth, 
shoes and other things which were made so hard to get because there 
was too much of them, were not partly burned up so as to relieve the 
existing distress. The statesmen told us such an order would be a 
good thing if it could be enforced ; but that two things stood in the way 
of burning up the surplus goods. First. The poor people would say : 
' These are just the things we are in need of — give them to us, instead of 
burning them up.' These poor people are ignorant of political economy, 
they cannot see the advantage of destroying surplus goods which cause 
hard times, and would raise a riot if such thing were attempted. 
Second. No one could be found who would be willing to have part of 
his surplus goods destroyed. Each man denies that he has too much, and 
insists that other people have too much of the very thing he needs. 

" We have talked with a kind of men in this country that are called 
scholars. This word has a meaning here different from what it has in 
China. We call men who think, scholars. In this strange country, the 
word ' scholar ' means a man who does not think himself but who has 
read what some dead scholar wrote about some other dead scholar who 
wrote about another dead scholar. We asked these scholars why the 
men who had too much of one thing and too little of another thing did 
not exchange goods with one another, and thus mutually supply each 
others' wants. We asked why the man with more wheat and less cloth 
than he wanted did not trade with the man who had more cloth and 
less wheat than he wanted. 

" The scholars told us this was so because trade in America was car- 
ried on with money, and there was so much money that trade had partly 
stopped. Then we asked, if trade had so stopped because the money 
was so plenty that no one wanted it, and would not give his goods in ex- 
change for it. The scholars said that, on the contrary, every one was 
anxious to sell his goods for money ; but money was so excessively plenty 
that those \Vho had possession of money did not wish to exchange it for 
goods, and therefore trade could not be carried on because money was 
hoarded. 

" These sayings of the scholars puzzled us very much. We cannot see 
why Americans should act so unlike the people of China. In China, 



332 SOCIAL STRUGGLES. 

people hoard scarce things ; they do not hoard what is so plenty that no 
one wants it. We find that whenever hard times come on in America 
(for hard times is the name Americans give to times when there is too 
much of everything), and there is too much money, the laborers get less 
money for a day's labor than when money is scarce. And, whenever 
there are too much food and clothing in the country, the number of 
beggars increases. The more these curious people are in want, and the 
greater and wider-spread the destitution, the more certain the American 
scholars are that there is too much of everything. Events in this country 
produce results directly opposite from what they do in China. Plenty 
IS as much dreaded here as famine is in our own country." 

" In traveling, we have been frequently pained by evidence that 
most of the people of this country have great contempt for China and 
Chinese customs. To learn why this is so we have privately talked 
with several ' statesmen, ' and have been told that this ill feeling is 
because its holders suppose our countrymen are mere imitators, follow- 
ers of old customs, without independence of thought or conduct. 

" Upon inquiring if the people of this country were original in thought 
and conduct, we were much amazed to discover that very few of them 
were, and that these few were called ' cranks,' ' lunatics,' and other deri- 
sive names. 

" We could write about many other perplexing things, but they are so 
numerous and so impossible of understanding we beg for our speedy 
recall to our native land where mysterious things do not beset the peo- 
ple on every side." 



CHAPTER XIII. 

' Prices : They are Always an Appraisal of two Things and a Comparison 
of One With the Other. — What Hard Pan is. — 13th-century 
Prices. — A Wedding in 1528. — Causes of Fluctuations in Prices. — ■ 
Natural Remedies. — Discounting the Future. — Dangers of Debt 
under the present Monetary System. — Power of Combined Money 
Capital. — Irregular Prices. 

Variations in prices are not the result of either accident or 

chance. They are the legitimate effect of unvarying natural 

laws acting under different circumstances and conditions. 

The product of an unchanging lata, acting amid changing 

facts, must vary with the altered facts. 

Heretofore, we have incidentally stated some of the princi- 
ples which govern prices, but some further consideration of 
this topic may be desirable. 

Considerable literature exists on this subject. Its value 
however is largely impaired by the fact that its authors 
have mostly assumed that the price of a thing" at different 
times simply represents the variations in the supply of, and 
the demand for, that thing. Misled by the " par value " 
theory, heretofore discussed, they have usually assumed that 
the value of gold and silver was stationary, and, in conse- 
quence, have been bewildered by facts, simple when viewed 
in a proper light, but impossible to explain on the usual 
hypothesis. 

Prices express ideas of the value of things stated in the 
money of account. Variations may occur in the price 
of a small number of things, owing to their increased or 
diminished supply relative to the demand, without any 
change in the value of money. But variations of the 
general average of prices always imply either a rise or 
a fall in the value of the money in which the price is stated. 

333 



224 SOCIAL STRUGGLES. 

WHAT HARD PAN IS. 

Much has been said during recent years of the desirability 
of getting prices down to " hard pan." Many persons im- 
agine it easy to put prices down to a level where they will 
remain without further fall. This can be done by putting 
prices at nothing, and in no other way. There is only one 
limit to which prices may either rise or fall, and that is the 
limit to which the currency may either be expanded or 
contracted. Contract the currency sufficiently and prices 
will inevitably fall to where they were six hundred years ago. 
What is now called a hard-pan price, would then be called 
''an inflated and fictitious value." 

13TH-CENTURY PRICES. 

In the 13th century, in England, money was very scarce 
and prices correspondingly low. Beef was worth one- 
quarter of a penny per pound ; butter, three-fourths of a 
penny per pound ; wheat, from six to ten pence a bushel ; 
cheese, one-half penny per pound. Ordinary tillable land 
could be bought for six shillings an acre. Laborers' wages 
were from half a penny to two pence a day. Carpenters 
received about three pence a day. 

Prof. Rogers gives us the following list of average prices 
in England from 1449 to 1450 : 

Wheat, 5 s. 10 d. a quarter, i. e., 8 bushels ; oatmeal, 5 s. a 
quarter ; beef, 4 s. i d. per cwt. ; mutton, 4 s. 6 d. per cwt. ; 
pork, 5 s. per cwt. ; geese, 4 d. apiece ; fowls, i 1-2 d. apiece ; 
pigeons, 4 d. a dozen ; candles, i s. i d. per dozen pounds; 
cheese, 1.3 d. a pound ; butter, i-2 d. a pound ; eggs, 5 3-4 d. 
for ten dozen. For nine months of the year, a master 
mason got 4 s. a week. Ordinary masons got 3 s. 4 d. a 
week for ten months of the year, and 2 s. 10 d. a week for 
the other two months. 

■ A WEDDING IN 1 528. 

How slowly prices have risen is shown by the following 
table, which is a price-list of some of the things consumed 
at a wedding feast in England in 1528 : 



WJIV PRICES CHANGE. 



335 



£ s. d. 

82 Geys I o 7 

47 Pyggs I 3 10 

64 Capons I 9 8^ 

74 Chekyns 8 2 

5 Oxen 6 13 4 

24 Weathers 3 4 o 

6 Calves 20 o 

600 Eggs 6 o 

19 Gallons Mylke i 7 

72 Barrels Beer 12 10 

Since 1873 we have been drifting rapidly back toward the 
prices in the above table. When " mylke " was sold for one 
penny a gallon how much wages did the man get who 
milked the cows? 

CAUSES OF FLUCTUATIONS IN PRICES. 

Many of the causes of fluctuations in prices are as com- 
plex as the workings of the human mind, Hopes tend to 
elevate prices, and fears tend to depress them. Fear of an 
impending evil, or change, will often lower prices more than 
the event itself. A slight decrease or a slight increase of 
the average amount of a crop of any kind often raises or low- 
ers the price far more than the percentage of change in its 
amount would seem to warrant. Mankind are largely gov- 
erned by emotions which are always contagious and often 
assume the form of epidemics. Men often follow their lead- 
ers as blindly as a flock of sheep. Whole nations will be- 
come excited with hope or plunged into gloom by distrust 
and apprehension. All changes in laws and customs, 
every invention, new developments in agriculture, mining, 
mechanics, and commerce, in short, every revolution of 
the social machinery of our race has a tendency to affect 
prices. 

Therefore, although changes in the amount of money are 
a dominant cause of changes in prices, they are by no 
means the sole cause of such changes. It must be borne in 
mind that as value is human judgment of the comparative 
worth of things, prices are therefore statements of relative 
appraisal, — they are estimates of relative value. Conse- 



336 



SOCIAL STRUGGLES. 



quently whatsoever cause sways human judgment, influ- 
ences prices. 

Those who have made the most careful examination esti- 
mate that from 1492 to 1800 the gold and silver mines 
of America poured into Europe about thirty times the 
amount of gold and silver that previously existed there. 
Allowing about one-half of this amount for losses, con- 
sumption in the arts, and shipment to the East, v/ould still 
leave the amount of precious metals fifteen times as great as 
before. Such estimates, however, must only be approxi- 
mate. 

Various computations have been made of the rise in 
prices which took place during the aforesaid period. These 
differing observers substantially agree on two points : First. 
The increase of gold and silver was a dominant cause of 
a great rise in the average scale of prices during said time. 
Second. The rise in prices did not keep pace with the 
increase in the amount of the precious metals. 

That doubling the amount of gold and silver in a country 
during a period of fifty years will not double the prevailing 
scale of prices in that country, a little reflection will show. 
In the first place, such multiplication of gold and silver is 
usually accompanied with a great increase in the population, 
commerce and wealth of that country. So that although 
the absolute amount of the precious metals may have doub- 
led, yet, at the same time, their relative amount has been 
comparatively little augmented. A change in the number 
of ounces of gold and silver in a country is governed by the 
same law which presides over a change in the number of bush- 
els, or the number of any other valuable things ; to wit, it 
is always the change relative to all other circumstances and 
conditions that determines what the result of such change 
shall be. Thus in a country whose commerce is steadily 
growing, the amount of gold and silver should simulta- 
neously augment to meet the increased demand for them ; 
otherwise, the amount of those metals will steadily grow 
relatively smaller and a tendency for prices to fall will nec- 
essarily be produced. 



BALANCES AND COMPENSA TIONS. 



NATURAL REMEDIES. 



33; 



A principle extends throughout the entire realm of 
natural law whereby every manifestation of force carries 
with it a correlative one. This related force has a ten- 
dency to modify or abate the action of its predecessor ; or in 
someway to supply what has been called a compensatory or 
balancing result. 

For example, a great wave of hot air immediately sets in 
action forces whose tendency is to limit its duration and les- 
sen its effect. The melting of snow brings with it a cool- 
ing effect which retards a rise in temperature. In like man- 
ner, every natural process has its remedy and counterbalance ; 
and what is true of inanimate things is true of mankind. 
All forms of human conduct have an attendant, as insep- 
arable from them as a shadow from the substance, which 
alters what otherwise would have been their product. 

Thus the actual condition of individuals and nations, in 
all respects, is not simply the fruit of their ignorant desires 
when they committed certain isolated acts or steadily fol- 
lowed a definite policy ; the final results of their conduct are 
always modified by attendant influences ordained by the 
Creator of natural laws. It is as if a beneficent spirit were 
constantly at hand seeking to interpose a cushion between 
us and the blows evoked by our folly. One manifestation 
of this principle is called by medical observers the " remedial 
force of nature," the "self-limitation of disease," a general 
understanding of which would revolutionize many of our 
modes of treating the sick. It deadens our physical suffer- 
ings, dulls the edge of mental anguish and often rescues us 
in spite of ourselves. 

The aforesaid plain considerations show how a rise of 
prices tends to check itself, and prevents it from reaching 
the height which otherwise would be attained. It necessi- 
tates the use of more money to exchange the same amount 
of property, and thus indirectly diminishes the amount of 
money relative to the demand therefor. In a similar man- 
ner, falling prices bring with them a tendency to check 



338 



SOCIAL STRUGGLES. 



the fall, and give prices an upward movement. Lower 
prices lessen the amount of money needed to transfer a 
given amount of value, and thus increase the relative amount 
of money in circulation. 

DISCOUNTING THE FUTURE. 

It is also apparent that the statement of opinion which 
forms a price is not based simply on the present situation 
of affairs. What the future is likely to be, often enters into 
the calculations of those who estimate values, more than 
the actual existing facts. Events, the influence of which 
will certainly depress prices, in the future, to an unknown 
extent, are often unduly magnified in importance. 

A belief that prices are not to be lowered in the immedi- 
ate future leads to two things, each of which tends to raise 
the previous scale of prices. First. Less money is hoarded,, 
and, consequently, more is put in circulation. In effect, 
more money is thrown upon the market and offered for 
sale. When it is supposed that prices will rise, it is also 
believed that hoarding of money will result in loss to its 
owner. Whatever a person wishes to buy can then be 
bought with less money than after the anticipated rise actu- 
ally occurs. Second. More business is done with substitutes 
for legal-tender money. People are more willing to give 
promissory notes and other evidences of indebtedness when 
they feel that the property bought therewith will not depre- 
ciate in value. 

In this way, prices often rise after some contraction of 
the legal tender has occurred, because an expansion of the 
substitutes for legal tender has taken place to an extent 
greater than the legal-tender currency was diminished. 
The highest range of prices occurs when a large amount of 
legal tender is in active circulation, and, at the same time, 
public hope is such that private credit in form of promissory 
notes is also largely employed. Prices are lowest when the 
legal tender is contracted simultaneously with a widely 
spread public distrust of the future, which induces a general 
contraction of private credit. Contraction of the legal- 



FALLING PRICES HINDER SALES. 



339 



tender currency is apt to produce a contraction of private 
credit in proportion as the fact is known, and the legal- 
tender contraction is supposed to be permanent. 

Prices are liable to undergo great changes just in propor- 
tion to the relative smallness of the amount of legal-tender 
money. This is so, because the use of private credit, as a 
substitute for legal-tender money, has then more relative 
influence in creating and supporting prices than when a 
greater proportion of legal tender is in use. The extent to 
which private credit shall be used is largely determined by 
human judgment of future prices, — by hope and by fear. 
Therefore, a nation which has a small amount of legal- 
tender money, and makes large use of private credit in form 
of promissory notes, bank bills, and other evidences of debt, 
is peculiarly liable to sudden and great fluctuations in 
prices. Instead of the "hard pan " that is talked of by 
friends of the English monetary system, the actual basis of 
prices in that country is the ever swaying emotions, 
thoughts, and conclusions of the human mind. 

The percentage which prices fall in periods of so called 
" overproduction " is only a portion of the losses thereby 
sustained by business men. The feeling that prices are 
going still lower largely stops sales at any price. The ma- 
jority of mankind are so constituted, that, when goods and 
real estate steadily fall in price until they are offered for 
one-half the former rate, they refrain from buying because 
fearful, if they do so, that the price will sink to one-quarter 
of the original sum. Many persons would be less likely 
to buy property for one-quarter its usual price than if the 
price had advanced beyond its ordinary level. This occurs 
because values and prices are statements of human judg- 
ment ; and the majority have little confidence in their own 
judgment independently of the opinions of other people. 

DANGERS OF DEBT UNDER THE PRESENT MONETARY 

SYSTEM. 

The foregoing considerations show the hazard incurred 
under our present financial system by those who carry on 



340 



SOCIAL STRUGGLES. 



enterprises, to a considerable extent, with borrowed capital. 
A man with a hundred thousand dollars of his own borrows 
a hundred thousand. The country is on what he supposes 
" hard pan " ; /. ^., specie payments. He imagines his 
property has an " intrinsic value " which cannot be shaken. 

Suddenly, the judgments of a large number of persons 
are influenced by fear. A few large failures have occurred, 
and there are rumors of more ; no one wants anything but 
legal-tender money, and the amount of that, relatively small 
at first, is diminished by hoarding. No one will take his 
notes. When he tries to sell his property, he finds that 
the intrinsic quality, he supposed it had, is gone. Men's 
judgments have changed, and values have changed with 
them. Meanwhile, interest, rent, the wages of employees, 
and other expenses go on without cessation. In the end, 
all his property is taken to pay a " hard pan " debt of one- 
half the original value of his estate. 

Quite often in such cases, not only is all the debtor's 
property gone, but a considerable amount of debt remains 
unpaid. In consequence of the delusion that hard times 
were created by a bankrupt law, that act has been repealed. 
The debtor thus finds himself stripped of property and 
without hope of ever getting any. But he has the satis- 
faction of constantly reading that " our financial system is 
highly scientific." * 

* According to the census of 1880 the public and railroad indebted- 
ness at that time was as follows : 

United States debt,. $2,120,415,063 

State and other public local debts, 821,967,447 

Railroad debts, 2,812,116,296 

Total $5,754,498,806 

The total population of the United States at that time was found to be 
50,155,783. Therefore, in round numbers each man, woman and child 
in the United States in 1880, on the average, had to pay the interest, 
directly or indirectly, on $114.00 of public and railroad debt. At five 
per cent., a family of father, mother and three children would have, on 
the average, to pay $28.50 per annum for interest. If fifty cents can be 
saved from each day's pay, this means the savings of 57 days' labor. If 



CAPITAL NEEDS RESTRICTION. 341 

POWER OF COMBINED MONEY CAPITAL. 

The concentration of wealth shown by the foregoing 
figures suggests the facihty with which the money capital 
of the country can combine for the purpose of securing 
such financial legislation as may suit its purposes. It is a 
very moderate statement, to say that one thousand men 
can readily be selected from the various financial centers of 
the United States, who, by virtue of their personal wealth 

only 25 cents can be saved from each day's wages, it means the savings 
of 1 14 days' labor. The more hours' labor " a dollar " means, the heavier 
the burden of public debt on the laboring classes. The danger that a 
course of procedure similar to that above sketched will be occasionally 
sprung, like a trap, upon unsuspecting debtors grows greater in propor- 
tion as the capital of the country accumulates in a comparatively few 
hands. 

The census of 1880 presents some facts which illustrate the tendency 
of our present social organization to concentrate wealth in few hands and 
consequently in few places. According to that report, the total assessed 
value of real and personal property in seventeen States was as follows 
Virginia, $308,455,135; West Virginia, $139,622,705; North Carolina 
$156,100,202; South Carolina, $133,560,135; Georgia, $239,472,599 
Florida, $30,938,309; Alabama, $122,867,228; Mississippi, $1 10,628,129 
Tennessee, $211,778,538; Arkansas, $86,409,364 ; Kansas, $160,891,689 
Louisiana, $160,162,439; Texas, $320,364,515; Nebraska, $90,585,782 
Colorado, $74,471,693; Nevada, $29,291,459; Oregon, $52,522,084. 
Total, $2,428,122,005. At the same time the following seventeen counties 
and cities were assessed as follows : San Francisco Co., Cal, $244,626,- 
760; Cook Co., Ill, $148,982,393; Orleans Co., La., $91,794,350; Bristol 
Co., Mass., $100,029,138; Essex Co., Mass., $155,241,900; Middlesex 
Co., Mass., $258,392,568 ; Suffolk Co., Mass., $658,220,621 ; Worcester 
Co., Mass., $127,690,969; Baltimore, Md. (City), $244,043,181 ; St. Louis 
(City), $165,288,400 ; Essex Co., New Jersey, $107,385,475; Kings Co., 
New York, $244,556,977; New York Co.. New York, $1,094,069,335; 
Hamilton Co., O., $207,324,047; Allegheny Co., Penn., $170,708,301; 
Philadelphia Co., Penn., $581,729,759; Providence Co., R. I., $178,448,- 
469. Total, $4,898,532,653. It further appears that Suffolk Co., Mass., 
New York Co., New York, and Philadelphia, Penn., had a total wealth 
of $2,334,019,715. If we omit the State of Mississippi from the foregoing 
list of States, the three cities, Boston, New York and Philadelphia have a 
greater wealth than the other aforesaid sixteen States with their vast area 
of fertile land. 



>, ^2 SOCIAL STRUGGLES. 

and leadership of other rich persons, can devise and indi- 
cate the policy which the concentrated capital of the land 
will combine its energies to secure. This is to say that, at 
any time during the past twenty years, the financial legisla- 
tion of the United States would have been completely 
reversed, if one thousand of the leading capitalists, whose 
wealth is chiefly in money and evidences of indebtedness, 
had thought it to their personal pecuniary interest to 
reverse it. 

The remedy for preventing concentrated capital, by its 
control of the press, the platform, and the pulpit, from 
securing special legislation is obvious. The mass of voters 
should learn economic principles sufficiently to immediately 
recognize measures cunningly intended for the aggrandize- 
ment of a special class, at the expense of all other citizens. 
They should fully understand that the major portion of the 
practical effect of financial legislation is the influence it will 
exert either to raise, or lower the average scale of prices. 
Furthermore, they should recognize that prices are, on 
the average, uniform just to the extent that the volume of 
circulating money enlarges and diminishes simultaneously 
with an increased or a diminished demand for it. There- 
fore a money and its regulation are perfect just in the 
degree that money maintains a uniformity of amount RELA- 
TIVE to the demand for it ; and such uniformity is only 
possible when the materials from which the money is made 
are immediately responsive to either an increased or a 
diminished demand for money; /, e., there should never be 
a dearth of the raw materials of money, and upon a cessa- 
tion of the demand therefor, surplus money should rapidly 
disappear from circulation. Then prices would be com- 
paratively uniform. 

IRREGULARITY OF PRICES. 

The following article, taken from the New York Tribune 
of August 2, 1886, is a good specimen of the kind of reason- 
ing used by those who believe in the mysterious, "unvary- 
ing;" value of gold : 



PRICES CHANGE UNEQUALLY. 



" WHY SILVER FALLS. 



343 



" An ounce of bar silver was worth a bushel of wheat at New York a 
year ago, and is worth a bushel of wheat at New York now. Then sil- 
ver sold at 49. igd. per ounce in London, and wheat 99 1-4 at New York. 
Silver was held at 42 3-4d. on Saturday in London, and wheat at 85 1-4 
at New York. Silver has fallen over 13 per cent., but wheat has also 
fallen over 13 per cent, during the year. 

" Careless thinkers say, ' This is only an increase in the purchasing 
power of gold, which has been made artificially scarce.' If it were so, 
other prices would be changed in like manner and measure. But corn 
then worth 52 1-4 cents is now worth 50; cotton then worth 10 1-2 cents 
is now worth 9.56; lard then worth 6 3-4 is now worthy; pork then 
worth! 1 1.50 now commands the same price ; coffee then worth 8 5-8 now 
sells at 9 1-2 ; sugar then worth 5.06 now sells at 4.69; iron then worth 
$17.75 is now worth $18; Bessemer rails then worth $27.25 are now 
worth $34.50 ; tin then worth 22 1-4 is now worth 21 3-4; copper then 
worth II cents is now worth 10; lead then worth 4. 15 is now worth 4.80. 
Here are changes so irregular that there has certainly not been a general 
increase of 13 per cent, in the purchasing power of gold." 

The above is followed by a verbose way of saying that 
silver coinage " operates to degrade and depress silver as 
nothing else could." 

The exercise of a little common sense and a little consid- 
eration of the facts which occur when prices are either 
steadily falling or steadily rising will explain the aforesaid 
irregular prices. 

When the currency is contracting, general prices, say of 
a hundred leading articles, never fall in a uniform manner. 
The price of some things may decline within a year fifteen 
per cent, and of others only five per cent. Meantime, some 
prices may remain unaffected, or may even advance. Spe- 
cial facts and conditions may temporarily be potential 
enough to keep a few things from sharing in the general 
decline of prices. A notable illustration of this is seen in 
the price of real estate. For the past thirteen years, in con- 
sequence of contracting the currency, there has been a 
general tendency for real estate to fall largely in price. But 
the land situated in a few locations has meanwhile risen in 



344 



SOCIAL STRUGGLES. 



value, as the result of the special circumstances under 
which it was placed. 

A similar fact occurs when the currency is expanding and 
prices are consequently rising. There is never a regular 
ratio and percentage in the manner by which prices change 
from month to month and from year to year. The line of 
advance, like that which marks the changes of the seasons, 
is an irregular one. While the prices of a majority of ar- 
ticles have risen, by a varying percentage, a few things may 
stand at the old quotations, or even be lower than before 
the general rise of prices set in. This may easily be verified 
by examining a file of commercial newspapers published 
from 1 86 1 to 1864. 

The aforesaid irregularity with which the prices of differ- 
ent things vary can only be explained by reference to the 
causes which produce all changes in prices. The range of 
prices at a given time is the resultant, the product, of the 
different forces and conditions which are then, and for some 
time previously, have been in existence and the public judg- 
ment thereon. 

An increase or a diminution of the currency changes the 
conditions from which prices spring in two ways. First, by 
the broad general influence exerted by such increase or 
diminution. 

Second, this general influence operates in various ways on 
different things, because each of those things is more or less 
surrounded with special conditions and circumstances. 

A heavy rain-storm operates in different ways on a crop of 
grass. It may benefit it, but if the grass have been cut and 
dried it may largely destroy its value. A general influence 
of any kind thus produces results varied by the conditions 
it affects. 

A tendency to a general rise or fall in prices sets in 
motion and operation currents and forces within the general 
influence. The. result of these opposing forces is seen in 
the fact that the order and ratio in which prices rise and 
fall vary both in time and in degree. These fluctuations of 
prices are a prominent evil of a currency subject to great al- 



UNEQUAL PRICES CAUSE INJUSTICE. 345 

terations in relative amount. If prices of all things thereby 
steadily rose and fell by a regular ratio and percentage, 
such prices could be estimated and allowed for with little 
difificulty in all forecasts of the future. In fact, if that were 
the case, no matter what changes prices were undergoing, a 
little arithmetic would enable a business man to translate an 
expanding or a contracting currency into a stable one. 

But where a general tendency has set in action a hundred 
minor forces, each of which is meeting a different resistance 
and operating under special facts and circumstances, not 
fixed but constantly changing, it is utterly impossible for 
any one to accurately predict what the price of a given 
thing at a specified date will be. The result is to reduce 
mercantile transactions, more or less, into a game of hazard, 
in which shrewd, cunning persons who watch the markets 
have an advantage over the masses whose thoughts are di- 
rected solely toward the creation of commercial products. 

Even between persons who have no desire to join the 
predatory classes, the aforesaid inequalities of prices often 
cause one person to inflict an unintentional injury on 
another. A forcible example of this occurred during the 
life of the Southern Confederacy, in which an acquaintance 
of mine was one of the actors. She sent her child to a 
school at which the yearly charges, before the war, were $100, 
but at that time said charges were $1500. She had a steer 
which in ordinary times was worth about $30. This animal 
she sold for $1500, and with the money paid the yearly 
charge, — thus discharging the debt with less than one-third 
the value she would ordinarily have justly paid. 

The above was one of a vast number of instances in the 
Confederacy in which the equities between individuals were- 
not fulfilled because of unsettled prices. Great as the evil 
of an enormous rise of prices was, that wrought only a por- 
tion of the mischief actually done. The irregularity of that 
rise, the eccentricity of prices, the fact that the products 
of one man's labor rose in price much more, within a given 
time, than the products of another person's labor, was also 
a fruitful source of evil. This arose from the lack of estab- 



346 



SOCIAL STRUGGLES. 



lished uniformity of public opinion and judgment in regard 
to the value of various things relative to the value of money. 
Circumstances changed so rapidly that time did not permit 
the formation of substantial unanimity as to what consti- 
tuted a fair appraisal and comparison of relative values. 

The idea expressed in said editorial, that the way to raise 
the price of silver would be to diminish the demand there- 
for, has heretofore been so fully discussed that it is needless 
to do more than suggest, if that be so, the converse is also 
true, viz., the greater the demand which may hereafter 
arise for silver, the lower the value of that metal will be. 
This simply contradicts all reason and all human experience 
in regard to silver and everything else. 

WHY FALLING PRICES THROW WORKMEN OUT OF 
EMPLOYMENT. 

When prices are steadily falling, large numbers of persons, 
able and willing to work, are always unable to obtain em- 
ployment. This fact is well known, but the cause of it is 
generally misunderstood. It is said, in a great variety of 
ways, that there are then more laborers than requisite to 
perform the work which employers wish done. And, 
curiously enough, those who make this almost self-evident 
statement fancy they have thus described the malady from 
which society is suffering. In fact, they have merely stated 
one symptom the source of which has not attracted their 
attention. 

In order to find out why one hundred thousand persons 
hire less workmen than come to them for employment, let 
us examine the conduct of one of those employers. A 
owns a large number of vacant lots, and is willing and 
anxious to erect houses thereon, provided the houses when 
finished can be sold for the cost of building them. This can 
be done when prices are stable. But when prices are fall- 
ing, so that a building which cost five thousand dollars can- 
not be sold for more than forty-seven hundred dollars, if A 
build a house and sell it, he is three hundred dollars worse 
off than if he had done nothing. The result is that he will 



RESULT OF FALLING PRICES. 



347 



stop building houses for sale, and consequently will not em- 
ploy the workmen he otherwise would. 

In the aforesaid case, the reasoning and the conduct of A 
are precisely analogous to the reasoning and actions of a 
multitude of other persons who, under a great variety of sim- 
ilar circumstances, would like to engage in enterprises which 
necessitate the employment of labor. They refrain from 
them, not because there is too much wealth already created, 
but because the work, when completed, cannot be sold for, 
or will not yield in some form, the number of dollars which 
were required to complete it. 

A number of wagons may cost ten thousand dollars to 
build and can only be sold for nine thousand five hundred 
dollars. But some one says : Are not the nine thousand 
five hundred dollars of as much value when the wagons are 
sold as the ten thousand dollars were when the wagons were 
in construction? Granted. But that fact does not help the 
matter. On the contrary, it is the root of the difficulty. 
The wagon builder says: " If I had remained idle and loaned 
my money for nothing, on good security, I would now be 
worth five hundred dollars more than I am. I will lock up 
my shop until prices have ceased to fall. There is neither 
pleasure nor profit in spending fifty dollars on a wagon and 
then selling it for forty-five dollars." 

When occurrences similar to the aforesaid take place, the 
" dollar," although nominally of the same value — i. e., at par 
— is actually steadily rising in value. Meantime, interest is 
apparently low and there is a common belief that " money 
is cheap." 



CHAPTER XIV. 

Specie Payments. — National Banks. — The essential Condition requisite 
to give Value to Paper Money. — Specie Payments. — Chief Objection 
to Specie Payments. — How Banks of Issue raise and lower Prices. 
■ — Essential feature of Specie Payments. — How Bankers evade their 
• Promises. — The Chief Evil of Specie Payments. — What occurred in 
1857. — What Experience has shown. — Legitimate Banking. — Na- 
tional Banks have Special Privileges. — National Banks are unfair 
Monopolies. — The Flow of Coin. — Results of Draining away Money. 
— A Universal Natural Law. — What we should Attempt.— The End 
toward which we are Traveling. 

A great outcry would arise if legislation were proposed 
which ivould enable any farmer, oivning and tilling one hun- 
dred acres of land, to borrow one-half t lie value of tJiat land 
of the Government at one per cent, per annum. But would 
this privilege be any 7nore unjust to other citizens, than to per- 
mit national bankers to borrow Government money at one per 
cent, per annum ? 

In an advanced stage of civilization, bankers are as neces- 
sary and useful members of society as blacksmiths. The 
issue of paper money by bankers is a wrong not necessarily 
or properly connected with their legitimate bicsiness and 
should not be confounded with it. 

To give a small class of persons such power, and place them 
in such circumstances that they can, with profit to themselves, 
injure the business and property of all other citizens, is both 
umvise and unsafe. When a nation places its sovereign right 
to issue money into the hands of bankers, it gives those persons 
the power to so manipulate the currency as to raise or lower 
prices, thus placing them under temptation to enrich them- 
selves at the public expense. 

We have heretofore found that the value of one of the 
units of a nation's money depends chiefly on the number of 
those units in circulation. No matter of what material this 
circulating money be made, whether silver, gold, or paper, it 
is all subject to the same general law. Many persons have 

348 



LIMITA TION OF MONE Y. ,49 

been confused on this topic from not remembering one 
practical fact relating to the manufacture of money. 

The raw material from which gold and silver coins are 
made is limited by nature to a comparatively small amount. 
This renders any other limitations on its coinage unneces- 
sary. For century after century those metals have had no 
artificial restriction on the amount of them which should be 
coined. The existing limitation on the coinage of silver is 
of recent origin and will probably soon be removed. 

But the material from which paper money is made can 
be produced in such enormous quantities that an artificial 
limitation on the amount of money made from it is abso- 
lutely necessary. When properly limited in amount, paper 
money is superior to all other kinds. 

THE ESSENTIAL CONDITION REQUISITE TO GIVE VALUE 
TO PAPER MONEY. 

It needs on it no promise of redemption in coin or bonds. 
AH that is necessary is the stamp of the sovereign power, 
making it a full legal tender and LIMITATION IN AMOUNT. 
Congress can pass a law by virtue of which all the existing 
greenbacks and bank-notes shall be destroyed, and their 
place filled by an issue of paper money which shall simply 
bear an inscription similar to that now placed on gold and 
silver coins ; viz., " United States of America. One dol- 
lar," and a kindred inscription for other denominations. 

The issue of any paper money, except these bills, by any 
person or authority, to be forbidden, both in peace and war, 
under any pretext whatsoever. This money to be a full 
legal tender at its face value, and to be regulated in amount 
by some efificient check. Such money would be .superior to 
any we have ever had. But this is not yet generally 
known. 

SPECIE PAYMENTS. 

Our monetary system represents the prevalent belief that 
paper money is more convenient than any other, but worth- 
less unless it has printed thereon a promise of its being re- 



350 



SOCIAL STRUGGLES. 



ceived at its face value, and an equal amount of coin given 
in exchange therefor. The issue by corporations of prom- 
issory notes to be used as money and redeemed by the mak- 
ers, in coin on demand, is therefore called " specie payments." 
The notes so issued as money are theoretically always 
worth as much as coin, and are loaned on interest by dis- 
counting promissory notes due in a short time. The profit 
of this business therefore depends on the amount of paper 
money which can be kept out at interest, in proportion to 
the amount of coin kept on hand for its redemption. If no 
more paper were issued than coin kept in the bank, the 
only advantage of bank paper would be in the superior con- 
venience of paper money over coin and the smaller danger 
of its being counterfeited. But as these advantages would 
inure to the public and not to the bank, there is no induce- 
ment for a bank to pursue such a course. 

Bankers who issue convertible notes are prone to inflate 
paper money, and to keep on hand the smallest possible 
amount of coin. They are in the position of a judge trying 
a case in which, personally, he has a large pecuniary interest. 
The system of convertible bank-notes thus violates the 
established principle that " human nature should not be. 
tempted." 

CHIEF OBJECTION TO SPECIE PAYMENTS. 

Therefore the chief objection to what is called " specie 
payments " is the fact that it does not secure stability in the 
amount of the money in circulation. When the currency 
should be contracted, the bankers are prone to inflate it ; 
and when they should increase it, they are apt to contract. 
They are governed solely by what they deem their own in- 
terest with little reference to what is best for the whole 
community. Before the war, the Connecticut State banks 
were considered as safe and strong as any in the Union ; in 
fact, their notes stood much higher than the average. In 
1861, when the Connecticut banks suspended specie pay- 
ment, their reserve of coin was higher than their average re- 
serve for the previous twenty-five years. Their coin, how- 



EVILS OF BANKS OF ISSUE. 35 I 

ever, was only twelve per cent, of their paper. They could 
maintain specie payments only on condition that seven- 
eighths of their paper were not presented for payment. 

HOW BANKS OF ISSUE RAISE AND LOWER PRICES. 

When public confidence that prices are not likely to fall, 
and in the immediate future of business is high, there is 
little demand for coin, as there is then little use for it. The 
banks are then constantly tempted to issue more notes, as 
all the notes they issue draw interest, and this increases 
their profits. The issue of additional notes tends to cause 
a rise in prices. A rise in prices generates increased confi- 
dence in the future, and affords buyers an opportunity to 
make a profit by purchasing to the full extent both of their 
means and credit. This causes an increased demand for 
bank-notes with which to make these purchases and meet 
the credits when they fall due. Thus one cause reacts on 
another, until more or less excitement is produced. An in- 
crease of excitement increases the amount of buying and 
selling and still further raises the demand for bank-notes. 
Finally, some disaster occurs which alarms the public mind ; 
— a rush is then made for coin and a disastrous panic is the 
result. The outstanding bank paper is not legal tender; 
and, as in a panic, nothing is good to pay debts with but 
legal-tender money, there is a fierce struggle to get legal 
tenders. This is intensified by the generally known fact 
that there is not coin enough to redeem all the outstanding 
paper, and therefore those who apply first will get coin and 
the rest will find that the bank has suspended payment. 
In the panic of 1873, the tendency of men, under such cir- 
cumstances, to eagerly want legal tender was illustrated by 
the fact that greenbacks then rose to a premium of four per 
cent, over national bank-notes. A man bound to pay his 
note before a given hour, or fail, wants something which the 
creditor is legally bound to accept. This feature of a panic 
would be materially mitigated by making all the paper 
money a legal tender for all purposes. But in order to do 
that, the whole idea at the bottom of the specie payment 



^H2 SOCIAL STRUGGLES. 

plan must be abandoned. We must adopt some other and 
more efficient mode of regulating and limiting the amount 
of paper money. 

ESSENTIAL FEATURE OF SPECIE PAYMENTS. 

Specie payments, so called, is nothing more nor less than 
a system whereby the amount of paper money is limited 
solely by the liability and obligation which the bank issuing 
it is under to redeem paper dollars with silver or gold dol- 
lars. Subject only to that check, there is no limitation 
whatever to the issue of an indefinite amount of paper 
money under the convertible note system. 

Under our national bank organization, the issue of addi- 
tional notes must be preceded by a deposit of additional 
bonds for security of the notes. But as these deposited 
bonds draw interest, this plan, while it affords another bar- 
rier against an undue increase of the circulating medium, 
presents nothing which obviates the chief objection to this 
mode of limiting and regulating the amount of paper 
money ; viz., the diversity of self-interest between those 
who issue paper money and the public. 

HOW BANKERS EVADE THEIR PROMISES. 

A convertible bank-note is a promise on the part of the 
bank to pay its face value in specie on demand. How is 
this promise fulfilled whenever an active demand for coin 
exists ? 

The banks, knowing that their issue of paper money is 
greater than the amount of their coin, and fearing to trust 
either one another or the people, adopt what seems the 
safest course for their own protection, without any regard 
whatever for the interests of the public. They receive in 
payment their own notes as fast as current payments re- 
turn them, and refuse to re-issue them for new discounts. 
This rapidly contracts the volume of the currency, increases 
the rate of interest and produces such a sharp demand for 
bank-notes with which to pay bank debts that the holders 
of these notes are more or less prevented from demanding 



SPECIE PA YMENT I NFL A TION. 



353 



their payment in specie. Instead of freely paying specie, 
according to the intent of their legal and moral obligations, 
the banks resist it with all the means in their power, and 
often avoid a suspension themselves by making many of 
their customers bankrupt, simply through inability to bor- 
row money for which they had ample security at the ordi- 
nary scale of prices. 

Bad inflations and panics have repeatedly occurred under 
specie payments both in this country and in England. An 
especially destructive panic occurred in England in 1825. 
This was shortly after she had resumed " specie payments," 
and, as was fancied, had placed her finances on a stable 
basis. The years 1814, 1816, 1825, 1837, 1838, 1839, 1847, 
1857 and 1 861 are notable demonstrations of the weakness 
of the convertible note system. Many who have not ex- 
amined the matter have imbibed the notion that England 
has had a stable currency since she adopted the gold stand- 
ard in 1 816. But in fact, no country has witnessed more 
frequent commercial revulsions. 

The Bank of Glasgow has comparatively recently shown 
us the weakness and evils of the system called specie pay- 
ments ; it has practically demonstrated that the amount of 
paper money in circulation needs more efficient and certain 
means of regulation. 

THE CHIEF EVIL OF SPECIE PAYMENTS. 

The radical evil of so-called " specie payments " is, that 
under it the amount of money in circulation, and, conse- 
quently, the average scale of prices are placed in the hands 
of a comparatively few bank officers. By means of expand- 
ing or contracting their promises to pay, they can make 
money plenty, or scarce, and diminish or increase the rate 
of interest whenever their imagined self-interest prompts 
them to unite for a common purpose. Thus the power to 
change the meaning of the vast number of outstanding con- 
tracts, in form of debts, is practically placed in the hands 
of men whose conduct is guided, not with reference to the 
23 



354 



SOCIAL STRUGGLES. 



welfare of the nation, but almost entirely with regard to 
their own narrow interests, as they see them. 

WHAT OCCURRED IN 1857. 

When the panic of 1857 began, the New York banks had 
in their vaults less than twelve millions of specie, and to re- 
tain this they made a desperate struggle. They kept up a 
steady contraction of bank facilities at the rate of a million 
dollars a day for sixty-six days. The rate of interest rose 
from eight to thirty-six per cent, per annum. Property 
shrunk enormously in value, and swift and widely-spread 
bankruptcy ensued. But even this severe blow at the peo- 
ple did not enable the banks to retain their coin. About 
the middle of October, four millions of specie were with- 
drawn and the banks suspended payment. The attempt to 
retain twelve millions of coin in the banks cost the nation, 
by stoppage of industrial enterprises, sudden derangement of 
business and loss of production by unemployed labor, at 
least one hundred millions, and careful writers have esti- 
mated the loss at three hundred millions of dollars. 

The action of the banks in 1857 is not an exceptional 
one. The system of allowing bankers to issue promises 
which will be used as money, as long as times go on 
smoothly, and be generally presented for redemption in 
legal tender only when the business world gets alarmed, 
places such persons in a position of antagonism to the 
public. Self-interest prompts them to unduly contract 
their issues just at the time when such a course will greatly 
aggravate the existing troubles. 

Having found that a bankers' mode of doing so will nat- 
urally and inevitably be adverse to the public welfare, we 
are warranted in concluding that the issue of money is not 
a proper function for a bank to perform. The chief object 
of government should be to so organize society that one 
class of persons will not have it in their power, without 
violating laws and subjecting themselves to severe penal- 
ties, to inflict great injuries on the rest of the community. 



WHAT LEGITIMATE BANKING IS. 



WHAT EXPERIENCE HAS SHOWN. 



355 



The world's experience has slowly but fully shown that 
the performance of any function or duty whatsoever, in 
which the selfish interests of those who perform it are 
often necessarily the opposite of the public good, should 
not be placed in the hands either of individuals or corpora- 
tions. The people's interests should be in the hands of 
persons who are employed by the people, and are surrounded 
with such checks as to make their selfish interests identical 
with those of the nation. Many things which were once in 
private hands have during the past century been taken 
charge of by the public. Who but a few persons that 
might make money out of it, would wish to see the carriage 
of letters taken from the Government and restored to pri- 
vate hands ? Formerly a considerable number of persons 
in every country were allowed to have private mints and 
issue metallic money. But this function has been taken 
charge of entirely by the sovereign power, and its 
advantages so clearly demonstrated that scarcely any one 
now thinks of a private mint. This has occurred because 
the selfish interests of private individuals or corporations 
are so often not in unison with the public welfare. 

LEGITIMATE BANKING. 

Legitimate banking consists of the purchase and sale of 
bills of exchange, the reception of deposits and the mak- 
ing of discounts, both with their own money and with a 
portion of the deposits. This is a proper and useful bus- 
iness for all parties concerned. 

Our national banking system cannot be properly called 
" good," because it is based on a false principle. That it 
is better than State banks is not a sufficient reason for its 
existence. Measles are not as bad as small-pox but measles 
are not therefore desirable. National banks, although bet- 
ter than State banks, are not as good as no banks of issue 
whatever. The real question should not be evaded. 



356 SOCIAL STRUGGLES. 

NATIONAL BANKS HAVE SPECIAL PRIVILEGES. 

National banks are associations who receive special privi- 
leges from the Government, These privileges consist in 
the right to draw interest on their debts. Ordinary persons 
pay interest on their notes. The national banks draw in- 
terest on their notes. 

Bank-notes are not as good as greenbacks. They are not 
a legal tender between individuals. The bank-notes are 
redeemable in greenbacks, thus showing on their face that 
they are inferior to greenbacks ; for why should a supe- 
rior money be "redeemed" in an inferior money? Much 
has been said to show that greenbacks cannot be money 
because they are a debt. Every national bank-note is a 
debt; it bears on its face the inscription: "The Na- 
tional Bank promises to pay." This promise is to pay in 
greenbacks. It is said that as greenbacks are a debt, they 
should be burned as soon as paid, because a paid note 
should be canceled. But those who propose this forget 
that, logically, every bank-note in like manner should be 
burned as soon as redeemed. This would soon leave us 
without any paper money at all, — a condition which no 
one advocates. 

Attorneys of the national banks have had the assurance 
to state that holders of national bank-notes have greater 
security than holders of greenbacks, because the greenbacks 
might be repudiated ; whereas the bank-notes are secured 
by United States bonds. It is true that the United States 
could repudiate the greenbacks. But it is also true that 
they could repudiate the bonds. As national bank-notes 
are redeemable in greenbacks, it follows that if greenbacks 
become worthless, the bank-notes will then be redeemable 
in worthless greenbacks. 

The greenbacks are secured by the faith of the people of 
the United States which is pledged to receive them as a 
legal tender in payment of taxes, and as a legal tender in 
payment of debts. Their value is also secured by their 
limitation in amount, and by the people's willingness to use 



UNFAIRNESS OF NA TIONAL BANKS. 



357 



them as a medium of exchange. The greenbacks bear no 
interest — hence their use has reheved the people of taxa- 
tion for that purpose. Had no national bank-notes ever 
been printed, we could have issued more greenbacks and 
avoided issuing over three hundred millions of interest- 
bearing bonds. 

Considerable ink has been used in showing the dangers 
of too many greenbacks. A national bank-note '^ inflates " 
as much as a greenback. But we do not hear lamentations 
over the amount of bank-notes ! ! The national bank-notes 
are printed at the expense of the United States Govern- 
ment. 

NATIONAL BANKS ARE UNFAIR MONOPOLIES. 

How can national banks be justly called monopolies when 
all persons are free to start national banks, and every one is 
at liberty to buy national bank stock? 

Because the national banking law is a gift of the public 
credit ; a gift of the use of the public necessity for paper 
money [which is public property] to the few persons who 
are in a situation to accept such gift and make it profitable. 
It is misleading to say there is universal liberty to own na- 
tional bank stock, — necessity prevents all but a compara- 
tively few persons from owning bank stock. For example, 
we have a Green in the center of this city. Every citizen 
owns a portion of that land, — it is public property intended 
for the use of all. Suppose the city authorities should say : 
"Any citizen can have a building lot on the Green, free of 
charge, provided, he build thereon a house worth $20,000. 
If this were, and could be legally done, a few men could 
thus get a lot for nothing ; the Green would be taken up 
for building purposes to the detriment, and at the expense 
of the great majority who were unable to build such an ex- 
pensive house. Is it not clear that the few persons Avho 
should thus appropriate the Green would be monopolists ? 
Under legal forms, by virtue of their wealth, they would be 
taking an unfair advantage of the public, and appropriating 



358 



SOCIAL STRUGGLES. 



to their own use public property without giving an equitable 
consideration therefor. 

The above supposed case would be a monopoly similar to 
the national banking system. While all citizens are nominally 
free to engage in the issue of paper money, according to the 
provisions of the national banking act, yet only a few can 
actually do so. 

The majority are obliged to keep all their means invested 
in a farm or a homestead ; or in the animals, buildings, 
machinery, or merchandise necessary to carry on their bus- 
iness. They have no surplus to invest in bank stock, hence 
they lose their portion of the value of the right to issue 
paper money, and are subject to increased taxation in order 
that those who are able to buy bank stock may get the 
benefit of borrowing money of the Government at one per 
cent, per annum. Government should be as simple and 
cheap as possible, and a great step in that direction would be 
taken by wiping out the whole machinery of officers and 
means whereby bank-notes are distributed to banks and the 
one per cent, tax collected thereon. Instead of handing 
notes over to the banks after certain formalities, and then 
paying men to watch the banks and collect its dues, the Gov. 
ernment should issue all the paper money directly. 

The issue of paper money by individuals and corporations 
is an old usage, but an abuse or a wrong is never made right 
by the length of time it has been committed. 

A persistent attempt has been unfairly made to justify 
the special privileges of the banks, by the plea that they 
pay such a large sum annually in form of taxes. Suppose 
the farmers or the manufacturers should compute the an- 
nual amount of tax which they pay, and then say to the 
Government : " We pay so much tax ; therefore, you should 
lend us money at one per cent, per annum." This would 
be no more absurd than the plea of the banks. 

THE FLOW OF COIN. 

The advocates of specie payments tell us that under 
such a system the amount of money in a country is properly 



THE TENDENCY OF MONEY. 3,5^ 

regulated by the automatic export and import of coin ; that 
when there is too much coin, prices are so high that mer- 
chants export coin instead of commodities ; that when 
there is a scarcity of coin, prices are so low that foreign 
merchants send in coin instead of commodities; that this flow 
of coin soon restores an equilibrium of prices thoughout the 
commercial world, and also supplies each country with just 
the amount of coin it needs ; and, as convertible paper 
money is based on coin, therefore specie payments provides 
every nation with its proper amount of money. 

This statement is not true unless made subject to several 
limitations. It is more correct to say that under specie pay- 
ments there is a tendency for coin to ebb and flow as above 
stated, but that this tendency is often so antagonized by 
other forces as to produce comparatively but little effect. 
Sometimes these opposing tendencies cause the flow of coin 
to cease entirely, and sometimes they retard it so that it 
produces but little practical effect on commerce and prices 
for a considerable period of time. 

All conditions are the resultant of two or more opposing 
forces which balance each other. Perhaps it would be more 
accurate to say that every occurrence — every natural phenom- 
enon, or fact, is an indication of the result of a conflict which 
is taking, or has taken place between two or more causes 
acting as opposing forces, in different directions. For exam- 
ple, in obedience to the law of gravitation, there is a ten- 
dency for the moon to fall to the earth. Its centrifugal 
force has a tendency to project it into space away from the 
earth. The two forces are so balanced that the moon circles 
around us. Tendencies frequently have no effect whatever. 
There is a tendency for wind to blow down houses, but ordi- 
narily it is not strong enough to overcome the inertia and re- 
sistance of the building, hence no effect is produced. Before 
a tendency can become effectual, it must be powerful enough 
to overcome or modify the existing conditions ; and, in ad- 
dition to that, it often needs to be strong enough to over- 
come new resistance and new opposing tendencies which its 
action has evoked. 



36o 



SOCIAL STRUGGLES. 



Money ordinarily commands about twice as high a rate of 
interest at St. Paul, Minnesota, as it does in New York City. 
There is therefore a tendency for money to flow from New 
York to St. Paul until an equilibrium be reached. Money re- 
mains permanently, and apparently disproportionately, high 
in St. Paul, because the tendency to a level between its price 
there and in New York is opposed by another tendency, viz., 
the tendency of the money-lenders to keep their money 
close at home. The rate of interest is much higher in 
New York than in Amsterdam, Holland. This creates a 
tendency for Amsterdam capitalists to send their funds to 
New York. This they do to a limited extent; nevertheless, 
the rate of interest between those places remains different. 
The natural desire of capitalists to invest their funds within 
easy reach is strengthened by the fact that in places where 
money commands a high rate of interest it is ordinarily much 
more difificult, and often impossible, to securely loan large 
amounts of money in single sums. 

RESULTS OF DRAINING AWAY MONEY. 

In a country with a contracted currency, prices of com- 
modities are too low and remain so until the proper 
increase of money occur. Theoretically, it is easy to see 
how such a nation can speedily supply itself with coin. It 
has only to stop all imports, except those of coin, and to 
export its cheap commodities in exchange for coin. But, 
practically, there are a host of obstacles which make such 
an undertaking a slow and difficult one. While these obsta- 
cles are being overcome, the value of property in that coun- 
try is lowered by reason of forcible, arbitrary changes in the 
conditions under which it is placed ; debtors are despoiled 
for the benefit of creditors. 

The actual and threatened contraction of the currency in 
this country which occurred after 1873, lowered the prices 
of our farm produce so that America was the cheapest coun- 
try for foreign nations to buy in. But several things pre- 
cluded us from getting a speedy supply of coin from sales of 
farm products. A fall in the price of wheat in America has 



RESUL T OF LO WE RING PRICES SUDDENL Y. 361 

a tendency to immediately depress prices of grain all over 
the world. This tends to create instant competition, at low 
rates, by other nations. 

The amount and value of the articles available for export 
in a country are always very small compared with the total 
wealth and business of that country. This is especially true 
in regard to a nation like the United States, which has a rel- 
atively smaller amount of personal, and more real property, 
than an old country like England. 

A general lowering of the scale of prices produces finan- 
cial disturbance and depression of business. Whenever this 
occurs in one country, it has a tendency to disturb the in- 
dustries of the nations with whom such country has a con- 
siderable trade. If one country cease to import goods, the 
country from whom they were formerly bought has less abil- 
ity to consume and pay for commodities taken in exchange. 

The amount of coin that any country can spare without 
financial disturbance is relatively very small, provided the 
nation losing its coin have what is called specie payments. 
When that small amount has been taken, the balance of the 
sum called for by foreign creditors, or trade, is paid either 
by commodities, by giving evidences of debt of the purchas- 
ing nation, or by returning the bonds of the selling nation. 
The latter has recently taken place, to some extent, to settle 
balances between America and England. 

Importations can be diminished, but a cessation, even if 
possible, would produce great commercial distress. Some 
importations supply habitual comforts and luxuries, the ab- 
sence of which would produce much popular discontent ; 
while other importations are the raw materials without 
which the creation of wealth in various forms would be 
seriously diminished. 

Massachusetts printed her first paper money in 1692. 
For fifty years before that time money was so scarce in that 
colony that cattle and grain were used and made a legal 
tender for taxes. During that period there was undoubted- 
ly a tendency for coin to "flow" into Massachusetts, but 
other and stronger tendencies kept it out, except to a very 



362 



SOCIAL STRUGGLES. 



limited extent. The chief of these tendencies was the fact 
that the people were so poor that they did not feel able to 
afford the expense of gold or silver money. Capital was so 
deficient, in comparison to the demand for it, that it was 
more profitable to keep it invested in other forms and dis- 
pense with metallic money. 

A UNIVERSAL NATURAL LAW^. 

This was simply an exemplification of the fact that when- 
ever an individual, a community, or a nation is hard pressed 
in the struggle for existence, no matter what form that 
struggle may take, the things apparently least vitally nec- 
essary to carry on the warfare are naturally dropped first. 
Metallic money is a form of capital for which substitutes can 
be found more easily than for some other kinds of capital. 
Hence, a nation engaged in a war, so desperate that every- 
thing must be used with the greatest effect, always 
exchanges its metallic money for other forms of capital. 

A country, as was the case with England in 1839, ^^^Y 
be rapidly drained of its metallic money, because several 
nations simultaneously draw it away. But when once lost, 
its recovery is a slow and painful process, during which 
time real estate and other non-exportable things are at a 
disadvantage and sink to a very low price. At the same 
time great financial embarrassment exists among business 
men, especially among those whose capital is more or less 
borrowed, and this creates suffering among the laboring 
classes. A nation, under such circumstances, is in a condi- 
tion similar to that of a man forced to raise money by sell- 
ing his property at auction. 

We are frequently told that a dollar is really worthless 
unless it is as valuable in foreign countries as in our own 
country. But persons who talk so might as well say that the 
laws of the State of New York are worthless because they are 
of no validity in South America or Asia. American laws, 
American schools and American money should be created 
for the best good of American citizens, without having spe- 
cial reference to the Hindoos, the Russians, or the Turks. It 



THE IDEAL DOLLAR. 363 

is not desirable to have the bulk of our national money 
made of materials that are liable to be affected in value by 
commercial disturbances in other countries. 

WHAT WE SHOULD ATTEMPT. 

We need to secure the greatest attainable stability in the 
value of our money. The ideal dollar never changes in 
value. To effect this, we should, as far as possible, shut 
off possible causes of fluctuation. 

In 1866 commercial failures for enormous amounts 
occurred in England and created a panic in that country. 
Had our currency been composed chiefly of gold we should 
then have been immediately involved in similar trouble. 
Owing to the fact that gold formed only a small fraction of 
our money at that time, this financial storm in London did 
not materially disturb business in New York. 

A uniform steadiness in industrial enterprises and pro- 
ductive business of all kinds would be promoted by having 
the capital whose special function is to exchange and dis- 
tribute wealth put in such form as to be free from danger 
of exportation. What would be thought of the sagacity of 
a machinist who should have the tools of his shop placed 
under the control of parties in London, Paris or Amster- 
dam? The money used by the American people bears the 
same relation to the industries of this country that a 
machinist's tools do to the workmen in his employ. Just 
in proportion as the tools are disturbed or taken away, the 
business of that shop is deranged. Just in proportion as 
the instrument of commerce, called " money," is disturbed 
or taken away, the industries of the country from which it 
is taken are deranged. 

THE END TOWARD WHICH WE ARE TRAVELING. 

We have heretofore found that the history of the devel- 
opment of the art of commerce shows a steady and irre- 
sistible tendency toward the final entire disuse of both 
gold and silver as money. We have nearly reached that 
point. The best authorities estimate that only about one- 



364 



SOCIAL STRUGGLES. 



half of one per cent, of the total exchanges made in Lon- 
don are effected by the use of metallic money. The rest 
are made with paper. 

But nearly reaching a point and getting there are two 
different things. We are traveling inevitably toward the 
exclusive use of paper money but have not yet reached that 
point. Except as they may be educational means, our 
progress in that direction cannot be hastened by special 
measures, because it depends on, and must keep pace with 
the slow growth of intelligence in all other respects. Even 
if we could, if would not be wise to make undue haste 
because a metallic currency is the best, unless a nation has 
risen to a sufficient height of intelligence and morality to 
wisely use a better one ; just as a strong despotism is best 
adapted to a people incapable of self-government, and of 
enjoying the blessings of liberty without falling into 
anarchy. 

In all probability, the United States are nearly ready to 
take two important steps. First. A removal of the present 
limitation of the coinage of silver, and consequently, of the 
limitation of the issue of silver certificates. Second. The 
entire abolition of national bank-notes, and the issue of 
the same amount of greenbacks to take their place. 

After the above measures have been a few years in force, 
the next step will be the adoption of some more efificient 
and reliable mode of regulating the amount of paper 
money than by its redemption in coin. The final measure 
will be the transaction of all business without metallic 
money. 

How long time will elapse before the aforesaid events 
will happen no one -can tell. But their occurrence is just as 
certain as the further development of the intelligence of 
the American people. 



CHAPTER XV. 

Franchises. — What a Patent is. — Patents may be used to plunder the 
Community. — What a Franchise is. — What a Railroad Franchise 
is. — Watered Stocks. 

The people have hitherto given azvay valuable franchises. 
In the future, they iv ill retain the ownership of all franchises 
and either use them directly or give leases subject to constant 
right of revision or cancellatiori. 

Through their agents, the members of State Legislatures, 
the people annually vote away a considerable number of 
franchises. Most of these franchises are given without the 
people, to whom they really belong, being fully aware of 
the real nature of the transaction which then takes place. 
As some franchises are very valuable it behooves every 
voter to inform himself on this subject in order to guard 
his property from spoliation. A striking illustration of the 
necessity of this occurred a few years ago in this city. The 
voters actually cast a majority of ballots in favor of giving 
away, without consideration, a franchise for supplying New 
Haven with water which carried with it ownership and con- 
trol of all the available water supply. On the day that vote 
was cast, said franchise was worth iive hundred thousand 
dollars ; and it is now worth much more than that sum. 
This happened in a city which fancies itself possessed of 
superior education and intelligence. 

WHAT A PATENT IS. 

A patent is an exclusive right to manufacture, sell, and 
use a certain thing. Patents are usually granted for only a 
few years, after which the special right of manufacture and 
sale is gone, and every one is at liberty to make and use 
what was previously protected by the patent law. A large 
amount of money is yearly spent in inventing things which 
can be patented, because the exclusive privilege of making 

365 



366 SOCIAL STRUGGLES. 

and selling a thing, especially if it be something which 
many persons want, often brings a large income to its pos- 
sessor. This is so chiefly because no one can enter into 
competition with those working under authority of the pat- 
ent while it is in force. No matter how unreasonably high 
the price of the patented article may be, nor how large the 
profits of those who make it, no one has a legal right to 
make a similar thing himself, even though it could be made 
for one-tenth part of its selling price. This removes those 
owning the patent from danger of others making the pat- 
ented article and selling it at a reasonable profit. 

PATENTS MAY BE USED TO PLUNDER THE COMMUNITY. 

An invention which saves labor is an addition to the 
wealth of mankind, because by its use more wealth can be 
produced with the same amount of labor than with the 
means previously employed. But during the time for 
which the patent be granted, its owner can force the public 
to give to him a considerable portion of the wealth created 
by using the patented article. After the patent expires, 
the whole community shares the benefit of the invention. 
For example, sewing machines and machines for cutting 
grass and grain sold at exorbitant prices until their patents 
expired. Such machines can now be had for one-half or 
one-quarter the price once charged. 

WHAT A FRANCHISE IS. 

A franchise resembles a patent. It is a particular and 
special right or privilege granted by the Legislature to one 
or more persons to use, enjoy, and make profit from a cer- 
tain property or thing. It usually differs from what we call 
" a patent " in this : It is granted forever and not for a 
few years only. A franchise, therefore, is not a patent 
which will end in seventeen years and thus thereafter let 
the whole people share its profits and benefits. It is a pat- 
ent for all future time. When a city gives a water com- 
pany the franchise of distributing water and collecting a 
water rate, it gives a perpetual patent to sell a prime neces- 



A FREQUENT FOLL V. 367 

sary of life. This folly will be less frequently committed 
when the nature of a franchise is more generally known. 

Suppose a merchant could now, as in the middle ages, 
get the exclusive privilege of making, or selling cloth in a 
certain city. Then no other manufactory or store could be 
opened in that city without his consent. Even if his prices 
were not extravagant, such an exclusive privilege would be 
valuable because it would prevent competition at lower 
prices. Such an exclusive right would be a franchise for 
making or selling cloth. 

The world has largely outgrown the practice of giving 
such franchises as the aforesaid. Formerly every business 
or trade which could readily be made the subject of a fran- 
chise was sold or given to a few individuals. It seems 
strange to us now, to think of a man having a franchise 
which gave him the exclusive right to grind grain into flour 
in a certain neighborhood. But it is only a comparatively 
short time since nearly every important occupation was 
made the subject of a franchise. 

Franchises are now restricted to a comparatively few 
things. A few bankers still retain the franchise of issuing 
paper money. A few cities grant franchises to companies 
for the purpose of bringing water into those cities and sel- 
ling it. But the great majority of franchises are now given 
to railroad, steam-boat, horse-car, and other transportation 
companies. 

When a franchise is given to build a railroad, the owners 
of that franchise have not only the right to prevent anyone 
else from building a road on the designated route, but 
they also have a legal right to take the property of any one 
they choose in the way of their road. It is true, they are 
required to pay for the property so taken, but this payment 
is often inadequate compensation. 

WHAT A RAILROAD FRANCHISE IS. 

Railroad franchises, in many cases, are very valuable. 
Practically, they are a perpetual patent on one of the great- 
est inventions of modern times; viz., the invention of 



368 SOCIAL STRUGGLES. 

building steam locomotives and laying smooth tracks on 
which to carry passengers and freight. The advantages of 
this invention are so enormous that competition by other 
forms of land carriage is practically impossible. 

In the absence of restraining laws, the owners of this per- 
petual patent, have therefore got the power to do precisely 
what the owners of sewing-machine patents did a short 
time ago ; viz., charge exorbitant rates for letting the public 
use the invention on which they hold a patent. There are 
cases of railroads charging six dollars per ton for carrying 
grain eighty miles. 

WATERED STOCK. 

Within a comparatively short time a new scheme has been 
devised whereby the public are made to pay an usurious 
rate of interest on the capital invested in railroads, while 
at the same time it appears as if only a fair rate of interest 
were charged. This cunning theft is accomplished by issu- 
ing stock for much more than the cost of the railroad and 
then charging interest on all this fictitious stock. To 
prevent the legislature from enacting laws which will pre- 
vent such wholesale robbery, this watered stock is artfully 
sold to a considerable number of innocent persons. The 
proceeds of such a sale are then used for originating and 
completing another similar transaction. It is a curious 
fact that those who have grown rich by such conduct are 
nearly unanimously in favor of " honest money " ; /. e., 
money which can most readily be used as an instrument 
for still further spoliating the toilers of the land. 

Three facts prominently appear in regard to railroad 
franchises. First. It is an imperfect remedy for the mis- 
take of giving them away, to sanction the building of par- 
allel roads. Experience has shown this to be not only use- 
less but an actual addition to the burdens of the commu- 
nity. Second. It is vain to trust that either the inherent 
honesty, or the self-interest, of railroad oiificials will lead 
them to forego opportunities to illegitimately enrich the 
railroad at the expense of the public. Such persons are 



THE PEOPLE SHOULD OWN FRANCHISES. 



369 



neither better nor worse than other individuals. But, as 
centuries of experience have originated and confirmed the 
maxim that " a judge should never sit in trial of a case in 
which his own interests may influence his decision," we are 
warranted in treating railroad officers as if they might possi- 
bly be led into temptation. Third. Franchises should be so 
granted as to insure the fullest and most immediate con- 
trol by the people. In all controversies between the roads 
and the public, both sides should be fully heard by an im- 
partial and intelligent tribunal. When a price is paid in 
consideration of a franchise, it should always be in form of 
a percentage of gross receipts instead of a sum which is 
given and received as full payment. This places the road 
under better control, and makes the public sharers in 
the increased business created by the labors of the 
public. In other words, the public should never part with 
the ownership of a franchise. When a disposition is made 
of it, other than operation by Government employees, the 
transfer should be by a lease which expressly states the 
right of the people, at any time, after reasonable notice, to 
revise its provisions or terminate it entirely. But all control 
of public facilities for transportation by individuals or cor- 
porations implies an imperfect state and organization of 
society. 
24 



CHAPTER XVI. 

Interest of Money. — The Rate of Interest is too High. — Why Men pay 
any Interest. — Human Nature is Unchanged. — Capital is Neces- 
sary to Existence. — Free Interest. — The Difference between the 
Rich and Poor. — DifTerent rates of Interest. 

What proportion of the product of the union of labor and capi- 
tal shall be paid to labor is largely determined by the rate of 
interest. 

Let us suppose- that Columbus when he discovered Amer- 
ica had found a sovereign power competent to contract with 
him for the Bale of the entire North American Continent. 
Suppose Columbus had made such a contract, and agreed to 
pay therefor his note dated in 1492, for one hundred dol- 
lars, drawing six per cent, interest, compounded semi-an- 
nually, and due in the year 1892. If such a bargain had 
been made, the successors of Columbus, when the note 
fell due would have found that all the personal and real 
property in Mexico, the United States and Canada which 
has been created and made valuable by the labor of millions 
of persons, insuf^cient to pay the debt. 

When we compute the result of putting a large sum at 
interest for a comparatively short time, we find it similar to 
putting a small sum at interest for a long time. If the 
United States had allowed all the expenses incurred in the 
late civil war to accurnulate at six per cent, compound in- 
terest until the year 1900, the bondholders would then have 
owned all the property in the country. Interest would 
have outstripped the accumulated savings of labor. 

THE RATE OF INTEREST IS TOO HIGH. 

The foregoing facts, and a multitude of kindred ones 
which could be adduced, show that on the average the rate 
of interest usually paid is much more than the average net 

370 



HUMAN NA TURE. 



371 



increase of the national wealth. In other words, the average 
rate paid for the interest of money is greater than the average 
savings of those who borrozv the money. That is : eapital, on 
the average, gets more than a strictly equitable share of the 
product created by its union with labor. 

The question arises : Why does the average man pay a 
higher rate of interest than he can afford ? Why do not the 
natural laws of trade reduce the rate of interest to a level 
with the earnings of the money for the use of which it is 
paid ? 

WHY MEN PAY ANY INTEREST. 

A deeper question lies behind the foregoing. Before in- 
quiring why men pay more interest than they can afford to, 
let us see why men pay ajty interest. Whatever diversity 
of opinions may exist in regard to some of the final con- 
clusions of Darwin, Huxley, Tyndall and their co-laborers, 
no one doubts or disputes their statement that the earth 
from the earliest period to the present day, has been the 
theatre of an unceasing struggle among all forms of animal 
life. The existence of every animal is maintained only by 
a constant effort to adapt itself to the ever changing cir- 
cumstances by which it is surrounded, — by unceasing efforts 
in self-defense or war with other species, and by continual 
struggles with other animals of its own race. What is true 
of the lower animals is pre-eminently true of man. History 
is merely a record of the struggles of the human race for 
existence, — it is the story of the efforts of man to unfold 
the secrets of nature, to make the elements his servant and 
not his master, and it tells us what fierce and unremitting 
war has been waged between man and man. 

Germany and France are no less antagonists to-day than 
they were a few years ago. The mode of contest is all that 
has changed. England and France, in essence, are just as 
truly at war at present, as when Pitt controlled England 
and Napoleon ruled France ; and England is still at war 
with the United States of America. 



17'2' 



SOCIAL STRUGGLES. 



Instead of the rude violence of physical combat and open 
war, the arts of diplomacy and commerce are employed.* 

Instead of organizing great masses of men for the purpose 
of obtaining mastery by butchery of their opponents, great 
numbers are now organized as workmen and artisans; the 
struggle for supremacy has taken a commercial and an in- 
dustrial form. Each nation, if it could, would at once ob- 
tain the ascendency and reduce others to commercial vas- 
salage. Between different parties, families, and individuals, 
a contest for mastery is always in progress. A constant 
struggle is made to secure the necessaries and luxuries of 
life, and in this race each one strives for his own personal ad- 
vantage. There is a fight every day going on in our social 
and commercial life which is just as earnest as the feuds 
of past centuries when opposing families, and individual 
enemies sallied forth with ax and club to despoil and con- 
quer one another. 

HUMAN NATURE IS UNCHANGED. 

Each century sees mankind more fully adopting better 
and higher standards of individual and national conduct. 
But the savagery of five thousand years ago continually 
crops out. Every baby is more or less a little barbarian. 

* During the last thirty years, a subtle and far-reaching influence has been 
silently interwoven with the policy of many of our richest and most prom- 
inent colleges. A desire to please both the actual and possible donors of 
those institutions, and the rich men who send their sons for education, has 
had a powerful influence on the college faculties, none the less because 
exerted so quietly as to render them often unconscious of its force. In- 
sidiously, those institutions have thus been so molded that the tendency 
of their teachings, the general drift of the social and political ideas they 
inculcate is to create a bias in the unformed minds of their pupils in favor 
of an aristocratic organization of society. As a natural accompaniment 
of such policy, a prejudice has been fostered against all doctrines and laws 
which favor an equitable distribution of wealth, and a social system based 
on democratic principles. The college atmosphere is permeated with the 
notion that the laws should be made and administered in the interest of 
the rich, and that all dissent from and criticism of the financial and social 
policy of England is evidence of ignorance and ill breeding. 



SELFISHA-ESS NEEDS RESTRAINT. 



373 



Human nature is unchanged. When we read about the 
political manoeuvers of Cicero two thousand years ago, we 
are forced to smile at their resemblance to the last presi- 
dential campaign. At present, powerful men in search of 
plunder instead of collecting a troop of savage horsemen, 
as they would have done 600 years ago, send a lobby to a 
State Legislature, or to Congress, to buy votes either di- 
rectly or indirectly. Instead of providing a lot of mail and 
spears, they hire writers and lawyers. They control the 
channels of public information in their interest. By rais- 
ing delusive cries and making false pretenses, they rob the 
people of valuable franchises, procure the change of con- 
tracts by cunning legislation, and plunder millions of peo- 
ple by monopolies. 

The change is merely in the kind of weapons, — we now 
use the weapons of sophistry, trade and law — but the inten- 
tion to beat, to outwit, and to rise above one another, re- 
mains. Man's natural inclinations are unchanged — he is 
selfish and he seeks to gratify his passions in whatever mode 
is most feasible. 

CAPITAL IS NECESSARY TO EXISTENCE. 

In this struggle for existence every self-supporting man 
is forced to engage. He may vary the fierceness and in- 
tensity of the purpose which animates him ; but, if he 
would, he cannot entirely avoid the contest, — -to some de- 
gree he must enter it. He can do but little with naked 
hands. He needs tools, means and weapons to carry on this 
unavoidable struggle. These helps are capital. Thus we 
see that every man, not already the owner of what capital he 
needs, must borrow it either directly or indirectly. This ne- 
cessitates either the direct or the indirect payment of inter- 
est. Bodily necessity is thus the ultimate force which com- 
pels a man without capital to pay interest. He must lodge 
on some one's property, and for this privilege he must pay 
interest either directly, by borrowing the money which is 
the price of his lodging-place, or indirectly, in form of rent. 
Even if land could be had for nothing, capital would be re- 



374 



SOCIAL STRUGGLES. 



quisite to make it available. It is immaterial what the form 
of wealth is which is hired, or in what form payment of the 
hire is made. The essential thing which constitutes inter- 
est is the payment of value in conside*ration of the use of a 
certain amount of property for a given time. Capital is a 
tool for creating other capital, and for 'supplying ourselves 
with the comforts of civilization. Owing to the limited 
amount of capital in the market for hire, and the imperious 
demand which is created by the sharp conflict for the nec-^ 
essaries and luxuries of life, there is an eager desire to se- 
cure it. In this struggle, the strong naturally use their 
power to take advantage of the zueak, and to force them to 
pay the highest possible tribute for the use of the means to 
obtain a living. 

FREE INTEREST. 

Many persons imagine true, the statement so frequently 
made, that " in the absence of laws the rate of interest is 
free." A man is " free " to go without the comforts and 
luxuries of life. In such a sense of " freedom," the interest 
of money without legal regulation is " free." In fact, men 
are obliged to pay interest, and a bargain, when one party 
thereto is under strong compulsion of some kind, is apt to 
be most in favor of the party not under an imperative ne- 
cessity. 

Under ordinary circumstances, with the help of money all 
other kinds of capital can be obtained. Hence, money is 
the form of capital which those who wish to supply them- 
selves with various tools to aid their labor in creating 
wealth usually wish to borrow. When money is to loan, 
this form of capital is virtually offered for lease, and the 
capitalist, knowing that the amount of capital for rent is 
limited, and that there will always be a brisk competition 
for it, hires it only to the man who will pay most for its use, 
and be most likely to return it at the expiration of the 
time for which it is let. There are instances of capitalists 
preferring to loan money to the persons most in need of it. 
But such persons are exceptional and rare. 



I 



COMMERCIAL WAR. 



375 



Persons who are capable, sagacious, industrious and eco- 
nomical can use capital to much greater profit and advan- 
tage than those who are weak, ignorant, unskillful, lazy 
and wasteful. Consequently, capital is worth more to the 
strong than it is to the weak, and therefore the strong can 
afford to bid a higher price for capital than the weak can 
really afford to pay. An intelligent, resolute man can often 
make a large amount of money by hiring capital at the av- 
erage, or even the highest rate, of interest. The result of 
these things is this : the capitalist wants the highest attain- 
able rate of interest, and the supply is so limited that the 
superior men would sometimes hire all the money if the in- 
ferior men did not offer the capitalist as much for it as their 
superiors stand ready to pay. 

A single individual, a Vanderbilt or a Stewart, may be 
capable of devising such ingenious, comprehensive and far- 
sighted plans for making money that he can successfully 
employ all the capital he can obtain. Borrowers bid 
against each other. The average rate of interest is not 
what capital is really worth to the average man, but it in- 
dicates what capital is worth to the few superior men, and 
what rate the average man has been compelled to pay by 
his necessities. The rate of interest is not what the bor- 
rower can " afford " to pay, but what the lender can compel 
him to pay in hopes of averting still greater losses or evils. 

In other words, tJie average rate of interest is the amount 
ivJiich the strong can compel the iveak, on the average, to pay 
for the use of money. 

The fact that capitalists prefer to loan money to those 
who apparently have great financial ability, tends to compel 
the payment of a high rate of interest. If a man in moder- 
ate circumstances offer a savings bank good security for a 
loan of three hundred dollars, the chances are that he will 
be unsuccessful. The bank officials tJiink that his loan 
would make as much trouble as a larger loan. They gener- 
allyj-^jj/." " Money is tight ; we have none for you." The 
borrower is consequently often obliged to pay a bonus to 
an individual in order to obtain a loan. But suppose an 



576 



SOCIAL STRUGGLES. 



able, wealthy financier should enter the same bank, immedi- 
ately afterward, and should ask for a loan of $25,000. The 
reply would probably be : " Yes, sir, we are always happy to 
accommodate you." 

THE DIFFERENCE BETWEEN THE RICH AND POOR. 

Many persons suppose that the difference between the 
rich and the poor is due solely to the superior industry and 
economy of the rich. This is sometimes a partial explana- 
tion, but in a vast number of cases it has no application 
whatever. The fact is that those who are rich by their 
own acts, are in a variety of ways stronger and more cunning- 
than the poor, and this gives them far greater power both 
of combining with one another and of controlling natural 
things for their own advantage. Moreover the rich, espe- 
cially the very rich, are usually not only more avaricious 
than the poor, and persons in moderate circumstances, but 
they are also more unscrupulous and remorseless. They 
are generally shrewd enough to avoid legal penalties, but, 
tested by the Sermon on the Mount, there is no more dis- 
honest and mean class of persons than the very rich men. 
Men like Peter Cooper are very rare. To-day, the expres- 
sion, " Woe unto you rich men," has the same profound sig- 
nificance it had when Christ uttered it over 1800 years ago. 

The charitable gifts of the rich are often cited as evi- 
dence of their goodness. But the merit of a gift is deter- 
mined only by the sacrifice thereby occasioned the donor. 
He who defrauds society of five hundred thousand makes 
a poor atonement and restitution by giving one hundred 
thousand to a hospital or church. More justice and less 
charity would benefit the working classes. It is a common, 
but grievous, error for voters to imagine the political de- 
sires of the rich, prima facie, best for the welfare of the 
public. 

DIFFERENT RATES OF INTEREST. 

Whether a lender of money can oblige a borrower to pay 
more for its use than equity require he should, and, if so, 



HIGH RATES OF INTEREST. -^yn 

to what extent this injustice can be carried, depends on at- 
tendant circumstances. The scarcity of capital, the urgent 
necessity of legal tender wherewith to avoid still greater 
impending losses, the borrower's lack of pecuniarily strong 
friends, the number of persons competing for loans relative 
to the amount to be loaned, usury laws, and many other 
conditions determine these questions. 

Thirty-five years ago, money in Iowa commanded 40 per 
cent, per annum interest. This was chiefly because the 
majority of emigrants to that State needed plows, wagons, 
axes, saws and kindred forms of capital wherewith to build 
their homes and improve their farms. Capital was scarce 
and the need of it, imperative. Money, the kind of capital 
with which all other kinds can be obtained, was scarce and 
in comparatively few hands. These few persons naturally 
took advantage of the situation, and demanded as high 
rates of interest as the borrowers could be made to pay. 
Interest in Iowa is now about olie-fifth what it then was, 
because capital has become plentier, money is in a greater 
number of hands, and consequently the necessities of the 
people cannot be taken advantage of to the same extent as 
formerly. But the same principle exists now that did when 
interest was much higher. The rate of interest is still too 
high, because the lenders can still take advantage of the 
borrowers' necessities. 



NOTE. 



Alexander Del Mar, in his " Science of Money," tells us that the 
rate of interest depends on " the rate at which the means of human sub- 
sistence increase. Other things being equal, were this rate to double, the 
net rate of interest would double ; and were the rate of the increase of 
subsistence to diminish one-half, the net rate of interest would diminish 
one-half." 

The above cause, he tells us, " is the ultimate cause of a rate of inter- 
est." He next says " that the market rate of interest differs from the 
rate at which the means of subsistence increase, because the lender must 
charge an additional percentage to insure himself against the risk of 
losing the money, for taxes, and for labor of superintending the loan." 

He then illustrates his propositions by stating that " in the United 



378 SOCIAL STRUGGLES. 

States the increase of the means of subsistence is probably about 3^^ per 
cent., while risk, taxes on loans of money, and cost of superintendence 
combined, probably amount to if per cent, more, making the average 
market rate about 5 per cent. 

The essence of this learned gentleman's essay on interest is that " the 
rate at which subsistence increases " is the net rate of interest which the 
lender of money should equitably receive for its use; and that, in fact, 
such is the rate which he actually does receive. 

In the first place, Mr. Del Mar errs in stating 5 per cent, as the average 
market rate of interest in the United States. In fact, it is nearer six per 
cent. Mr. Del Mar probably reaches his conclusion by computing the 
money loaned in New York and a few other large cities " on call " as 
money loaned at the market rate of interest. But this is not strictly 
proper. Money, which the borrower is expected to return any day when 
requested by the lender to do so, is not completely loaned. It is not as 
fully under the control, and cannot be used with the same freedom as it 
could if the borrower had ample and secure time for its employment. 
There is a reservation of possession made by the lender when he loans 
it on call. That is, he reserves the right to take possession of his money 
any day he may elect. In fact, his control of money loaned " on call,'" 
with ample pledges given for its payment as specified, is virtually as 
absolute as if he had deposited the money in a bank ready to be taken 
out on any day by his check. In the latter case he trusts the bank will 
always honor his check and pay " on call." But when he loans on call, 
with pledges received for security, he does not trust any one ; he relies 
on the pledges in his possession, confident that if payment be not made 
their sale will yield ample means of payment. 

This is a far different condition from what exists when money is 
loaned for a considerable period of time. In that case, no matter how 
advantageous arising circumstances might make it for the lender to 
recall his loan on a certain day, he cannot do so. The money is 
beyond his control until the expiration of the time for which it was 
loaned. This latter condition is the only one which is a fair test 
of the interest of money, because it is the only way in which a loan of 
money can be fully and unreservedly made. 

Mr. Del Mar's idea that the rate of interest is partially formed of a 
sufficient sum to pay the taxes on the money and the legal expenses of 
making the loan is disposed of by the fact that taxes and attorney's fees 
attendant on loans are almost invariably paid by the borrower. 

One other claim of Mr. Del Mar remains ; to wit, that an addition of 
at least one per cent, should be made to what he calls the " net rate of 
interest " ; i. e., the rate at which the means of subsistence increase, as 
insurance for repayment of the loan. 

Suppose a farmer borrow $1000 for five years, for the purpose of 



WHY INTEREST /S TOO HIGH. 



379 



purchasing additional capital to cultivate his farm, and thereupon 
mortgages his farm, worth $5000, to secure its payment. Mr. Del 
Mar's idea appears to be, that inasmuch as the increase of the farmer's 
products is about 3 1-3 per cent., that is the rate of interest he is equit- 
ably called on to pay for the use of the money ; and he should also pay 
nearly two per cent, more to insure the borrower that the money will 
be repaid. But the farmer has already insured payment of the loan by 
giving a mortgage on his farm. This is ample insurance of itself. In 
equity, why should the farmer insure the lender further ? The farmer 
incurs all the risk of losing the |iooo by bad crops, fire, death of cattle, 
etc. The lender does not insure him against loss. Why then should 
the farmer pay additional interest to insure the lender further than the 
mortgage has insured him ? 

There is a comparatively small class of loans which are specially haz- 
ardous to the lender. In such cases a high rate of interest, or, in other 
words, an extra percentage as an insurance premium, is just. Loans on 
ships are an illustration of this. But the great mass of loans are made 
by giving mortgages on land or other good security for payment. 

If we admit that the borrower should pay an addition to the net rate of 
interest, as an insurance, sufficient to cover the risk of non-payment, it 
by no means follows that this insurance should equitably be nearly two 
per cent. If one per cent, per annum could be generally received for in- 
suring payment of loans, an enormously profitable business could be 
done by such an insurance company, in all of our large cities. One-half 
of one per cent, would be sufficient to amply insure payment of mortgage 
loans, and municipal bonds, in the greater portion of this country. 

The fact assigned by Mr. Del Mar as " the ultimate cause of a rate of 
interest" has unquestionably a powerful tendency to produce a market 
rate of interest. But it is only one of several other facts which operate 
to determine the actual interest rate. The dominant factor is that above 
stated in the text ; viz., the industrial and social war constantly carried on 
by each member of the community against all other members, and the 
necessity of capital wherewith to supply human wants and desires. 

A very prominent cause of a higher rate of interest being paid than 
is earned by the money borrowed, is the fact that such interest is usually 
paid on only a portion of the debtor's total capital. Circumstances are 
such that it is supposed the loan will add largely to the productiveness 
of the capital previously possessed. 

For example, a farmer has 150 acres of fertile land, well supplied with 
buildings, stock and farming implements of all kinds, except plows and 
wagons. Without these essential tools, it is impossible to advanta- 
geously cultivate the farm. Under such conditions, the farmer can pay a 
higher rate of interest than the creditor is equitably entitled to, and still 



38o 



SOCIAL STRUGGLES. 



be far better off than he would have been without the means of buying 
needed tools. 

The doctrine is usually taught that legal limitations on the rate of 
interest make the actual rate higher and thus increase the burdens of 
debtors. The repeal of usury laws is frequently asked for on the ground 
that it would help debtors by lowering the rate of interest. 

But what class of persons is it that ask for the repeal of usury laws ? 
If such laws resulted in greater profits to the money-lenders, would those 
persons want them repealed.'' 

The repeal of usury laws is always asked for by the money-lenders 
under the hypocritical pretense that such a measure would lower the rate 
of interest. When the legal rate of interest is placed at six per cent, no 
legal obstacle is thereby presented to lending money at a lower rate. 

A few years ago, the Connecticut Legislature was persuaded by charla- 
tans that a repeal of the usury law would at once prevent the flow of cap- 
ital from the State, make money plentier and thus lower the rate of inter- 
est. The experiment was tried. The result was an immediate attempt 
by the money-lenders to compel payment of higher rates. In the major- 
ity of cases they were more or less successful. Instead of six per cent., 
money loaned at seven, eight, nine, and sometimes twelve per cent, per 
annum. A re-enactment of the usury law restored the former conditions. 

Capital, unless dishonestly got, represents savings. Savings represents 
industry and economy. A fair rate of interest to capital is an encour- 
agement to industry and frugality, and therefore conducive to the public 
welfare. 

But in order to be equitable, the rate of interest should not be greater 
than the relative earnings of the capital thus combined with labor. In 
fact, the lender receives more than such an equitable proportion, in a mul- 
titude, if not in the majority of instances. The borrower often becomes 
bankrupt in consequence. Thus the goose that laid golden eggs is sacri- 
ficed to greed. A portion of the principal is lost by trying to get an unfair 
rate of interest. 

The actual difference, in the burden upon the debtor, between three, 
four, five and higher rates of interest is not usually recognized. If three 
per cent, be the average net earnings of labor and capital, the average 
borrower is not injured at all by payment of three per cent, interest. 
He derives the same benefit from the use of the money that he pays for 
it. But if he pay four per cent., the benefit received from the loan is 
paid and one third more. But five per cent, interest takes two thirds 
more than the advantage of the loan from the debtor. The actual ex- 
pense to a debtor of a five per cent, rate of interest is therefore twice 
as great as a four per cent. rate. 

The aforesaid principle is true of the payment of all rates of interest 
above the earnings of the money on which it is paid. The burden of in- 



WHEN DEBT IS PROFITABLE. 



381 



terest is measured by its excess over ihe profit derived from the loan 
and not by the total rate. 

A debt is not necessarily a burden ; it may be a source of profit. Per- 
sons have grown rich from the income of their debts. If the income 
from w^hat constitutes a debt exceed the interest paid thereon, the debtor 
reaps an advantage from being in debt. 

When a banker owes his depositors five hundred thousand dollars, on 
which the total expenses are one half of one per cent, per annum, and 
keeps four hundred thousand of this money loaned at six per cent., he 
is getting a net income of twenty-one thousand five hundred dollars an- 
nually from his debts. When a national bank borrows five millions 
from the government at one per cent, per annum, and keeps four millions 
loaned at five per cent., it derives an annual profit from its debt of one 
hundred and fifty thousand dollars. 

Usury laws should discriminate between loans amply secured by mort- 
gage on real estate, or by pledge of bonds or similar ample security, 
and loans resting entirely on personal promises. The rate of interest on 
good mortgage, or similar security, ought not to exceed four per 
cent, per annum ; and loans on personal security, not over five per cent, 
per annum. Such measures would increase the probabilities of the 
borrower's success in business enterprises, and would therefore diminish 
the aggregate of loaned money lost by bankruptcy of debtors. The 
whole community would thus be benefited by fair dealing. 



CHAPTER XVII. 

The Relations of Capital and Labor. — Need of more Capital than before 
Expensive Machines were used. — Mistaken Ideas about Freedom of 
Trade. — Patent Laws cause an Inequitable Distribution of Wealth. — 
Nature of the Antagonism between Capital and Labor. — Different 
Interests produce Different Conduct. — Why Laws were Created. — 
Why Laws should Continually Change. — Contention between Labor 
and Capital should be settled by Law. — Origin of Law. — Further 
progress is Necessary. — Ought every Man be Allowed to Do as 
He pleases. — A Dangerous Doctrine for the Rich to Preach. — What 
should be. — Rise of Rents. — Hours of Labor. — Comparison with a 
Hundred Years ago. — Is Equity being done ? — Free Trade is Pos- 
sible only when Both Parties have Liberty of Choice. — How Work- 
men may Rob Employers. — When Free Trade occurs. — What a 
Good Bargain is. — Laws are Outgrowths of Human Necessity. — 
Siege of Paris. — When Laws need Revision. — Test of the Wisdom 
of a Law, 

Wit/i ivhat tranquillity and calm resignation we all bear 
the losses and sufferings of others. 

To a large extent, capital represents the labor of past 
generations. It may be called dead men's labor, because a 
large portion of it was created by men now dead. This 
fact, in the continual struggle between capital and labor, 
gives an advantage to capital. Capital represents the dead 
laborer. Labor is represented by the living workman. 
Capital needs protection from rust, fire and decay; but, un- 
less in form of living things, it does not need food, warmth 
and clothing. Labor must have food, shelter, warmth, and 
clothing ; it cannot wait a year, a month, or a week ; it 
must have them constantly or perish from cold and starva- 
tion. Capital is not in need of daily sustenance. Dead 
muscles need neither food, drink, or shelter ; and therefore 
capital, their representative, can lay its plans for the future 
and wait. It knows the living muscles must be fed and 
that imperious necessity will forbid their waiting in idleness. 
The labor of the dead thus often gains a victory over 

382 



POWER OF CAPITAL. ^83 

the labor of the living; — the lifeless hand is most potent, 
— it places fetters on the one throbbing with warm blood. 

The man who keeps his capital secure, but idle, loses only 
the profits he might have made from its use. The poor, idle 
workman loses his entire capital every day of his idleness. 
Capitalists often lose large sums as the result of strikes; 
but the damage to the idle workmen is usually relatively 
larger. 

NEED OF MORE CAPITAL THAN BEFORE EXPENSIVE MA- 
CHINES WERE USED. 

Comparatively little labor can be done with naked hands. 
A tool of some kind is usually needed, and this tool is capi- 
tal. A man who cuts grass or grain with his own tool needs 
a little capital if he use a common scythe to perform the 
work. He needs much more capital if he use a team of 
horses and a mower or reaper. This is why labor-saving 
machines tend to give capital an advantage over labor. 
Some of them are very expensive, and so efficient that a 
workman who should undertake to compete therewith, by 
hand labor, with a few simple tools, could only earn from 
one to five cents a day. This puts the man with nothing 
but his bare hands at a greater disadvantage to the capital- 
ist than he was two hundred years ago. Labor has always 
needed capital ; the changes wrought by new inventions 
simply make it imperatively necessary for labor to use a 
larger amount of capital in the performance of a certain ser- 
vice, in order to successfully compete with those who are 
supplied with improved tools. In the end, new inventions 
benefit the laborer, but there is a stage in their history when 
they can be used as instruments to increase the profits of 
the rich, and to unfairly lower the wages of the poor. 

The enormous advantage given to capitalists by the in- 
vention of expensive machinery which renders hand com- 
petition utterly impossible is increased by our patent law sys- 
tem. In the majority of instances, inventors lack the requi- 
site capital to utilize their patent after it is obtained. In 
most cases the result is the sale of the patent, at a nomi- 



384 



SOCIAL STRUGGLES. 



nal sum, to a capitalist, who is thereby enabled to monopo- 
lize the manufacture of a particular thing. No matter 
how large his profits, nor how necessary to the progress of 
society his goods may be, the whole power of the Govern- 
ment is marshaled to prevent any one from interfering with 
his exclusive privilege. The owners of patents are thus 
often enabled to levy an enormous tax on the nation. At 
the same time the wages of their operatives may be low, and 
many persons who formerly earned fair wages in the same 
kind of industry with the old and inferior tools are thrown 
out of employment. 

MISTAKEN IDEAS ABOUT FREEDOM OF TRADE. 

It has been said that every one is " free " to buy patented 
goods or not, as they choose. But, in fact, the majority are 
compelled to buy, either the patented machine which per- 
forms a certain service at a diminished cost, or the cheap- 
ened article manufactured therewith. 

Suppose there are ten dealers in tin-ware in a certain city, 
and a machine be invented wherewith one man can perform 
the labor in making tin-ware which previously required the 
work of six men. When one dealer buys one of these ma- 
chines and puts it at work, all others in competition with him 
are forced either to buy a machine, to buy the goods made 
by the one in operation, or be made bankrupt. 

PATENT LAWS CAUSE AN INEQUITABLE DISTRIBUTION OF 

WEALTH. 

The great wealth created in England as a result of im- 
proved machinery for working iron and making cotton and 
woolen goods was not equitably distributed among the 
workmen whose toil created said wealth. On the contrary, 
an English historian tells us that from 1780 to 1820, the pe- 
riod when some of the greatest inventions were cheapening 
the manufacture of goods, the English laborer fared rela- 
tively worse than at any time for six hundred years. 

An inventor is a benefactor of society. He should be 
well and liberally paid for his mental and physical labors, 



DIFFERENT VIEWS. 



385 



and for the expenses incurred in perfecting his invention. 
But this compensation should not be made in such form as 
to prevent the benefits of the invention from being at 
once shared by the whole community. 

NATURE OF THE ANTAGONISM BE^TWEEN CAPITAL AND 

LABOR. 

What has been heretofore said about the interest of 
money applies to the general relations of capital and labor. 
It is undeniably true that to a certain extent they are mut- 
ually dependent on each other, and that there should be an 
equitable and a harmonious union between them. But, as 
a matter of fact, this condition generally exists only in the 
imagination ; each seeks its own welfare with little regard 
for the interest of the other. 

Much has been said about the identity of interest exist- 
ing between labor and capital. But in fact their interests 
are very far from being identical. 

It is true that it is not to the selfish interest of either to 
force their opponents into so hard a bargain as to utterly 
destroy all power or desire to fulfill any part of it. It is 
not to the interest of capital to force labor into starvation 
or insurrection. It is not to the interest of labor either to 
destroy capital, or to prevent it from receiving any share 
of the profits of industrial enterprises. 

Perhaps it would be more accurate to say that there is an 
imaginary point at which the just dues of labor and the 
profits of capital would be both satisfied in a manner at 
once equitable and expedient. But, while such an ideal 
harmony may exist, the interests of capital and labor are 
far from being identical as the opposing parties understand 
them. 

The average capitalist will tell you that his interests and 
those of his employees are the same ; but when called on to 
state those interests, he will define them differently from 
his workmen. The laborer will perhaps tell you the same 
thing. But he too, if asked what those interests are, will 
state them differently from what his employer would. The 
25 



386 SOCIAL STRUGGLES. 

slave-holder never had any doubts about the harmony 
between his interests and those of his slaves; but the slave 
had a different view of the matter. To-day, the rich and 
privileged classes of England regard their interests as 
identical with those of the multitude of poorly paid and 
poorly fed laborers ; but the toilers look on those interests in 
a far different light from those who are not making a painful 
struggle for the bare necessaries of life. The privileged 
classes suppose there is harmony when matters are arranged 
to suit themselves, without consulting others whose rights 
may be sacrificed thereby. 

The rapidly growing army of young men and women in 
the United States who have never earned in their whole 
lives the bread they consume in one day, will talk about 
their interests being identical with that of the farmers and 
mechanics. But this identity, they usually imagine, consists 
in living a life of ease and consuming the products of 
others' toil. They fail to see that labor is not always an 
amusement. 

Capital and labor have always been at war with each other. 
They are natural antagonists in the sense that buyers and 
sellers are. A seller naturally tries to obtain the highest 
attainable price ; a buyer seeks to get what he wants at the 
lowest possible price. Comparatively few persons are 
governed by considerations of equity ; the majority are 
guided by selfishness, and this is often so blind as to 
overreach itself and defeat its own objects. This is true of . 
multitudes who imagine themselves governed only by the 
highest principles of religion and morality. In fact, some 
of the hardest, meanest and most grasping persons in the 
world are found among those who pride themselves on their 
strict rectitude. 

An employer is a buyer of labor and a seller of money. 
He does not usually ask: What is just? His selfishness 
prompts him simply to inquire how low wages he can name 
and get the required services. A workman is a seller of 
labor and a buyer of money. He naturally tries to sell his 
labor as dearly as possible and to buy money as cheaply as 



NEED OF JUST LAWS. ,g^ 

he can ; his conduct is usually controlled by the same mo- 
tives that influence his employer. There is not one kind of 
human nature for one class, and another kind of human na- 
ture for another class. Legal regulations are necessary to 
prevent opportunities to commit wrong from being trans- 
lated into actual injustice by all classes. 

We have heard much about the wickedness of arraying 
labor against capital. They are already arrayed — their war- 
fare is merely one phase of the struggle for existence which 
has always taken place between one animal and another. 
Nothing is gained either by ignoring or misrepresenting 
existing facts. In several ways, during recent years, mon- 
eyed capital has carried on an organized, aggressive and 
successful campaign against labor and other kinds of capi- 
tal. Many think that right, who are horrified at the idea of 
labor combining against capital ; their notions of morality 
depend on whose ox is getting gored. 

If money-lenders have a right to advance their interests 
by organizing a trade union under the name of a " Bankers' 
Convention," have not brick-layers a right to form a Union 
for the protection of their interests? If stove dealers have 
a right to combine and fix the price of stoves, have not 
those whose labor creates those stoves an equal right to 
combine for the purpose of fixing the price of their labor? 
But a little reflection shows that the organization of differ- 
ent interests and trades for mutual help, and for protection 
against the aggressions of other persons and organizations, is 
founded on a radically false principle. One class, one trade 
and one interest can undoubtedly, in the outset, promote 
its individual prosperity by "organizing." But other and 
opposing organizations will soon be formed; and this pro- 
cess may continue until every separate trade, class and 
interest in the entire nation has what is called "an organ- 
ization." Society, as a whole, will then be back to the 
point from which the first combination started, with, how- 
ever, an essential difference ; viz., the great expense of 
maintaining a multitude of organizations which are of no 
benefit whatever, except to those who draw salaries. 



388 



SOCIAL STRUGGLES. 



The true way is to make the laws and their execution 
broad and just, and dissolve all combinations of particular 
trades or persons. Every citizen should have equal rights 
and protection, not from a class organization, but from the 
justice of laws covering every person and place. 

DIFFERENT INTERESTS PRODUCE DIFFERENT CONDUCT. 

Many well-meaning efforts to equitably adjust the relations 
of labor and capital have failed because made from the wrong, 
standpoint, viz.: On the theory of their natural harmony. 
Persons with similar interests naturally fraternize with 
each other. There is no need to effect harmony, if it nat- 
urally exist. 

Animals with similar interests live together peacefully. 
Quail do not quarrel. But the interests of some animals 
conflict with the interests of other animals, and even with 
those of their own race. How would a man succeed who 
attempted to persuade a fox and a flock of quail that their 
interests were harmonious? The interests of different 
classes of persons are often nearly as diverse as the inter- 
ests of a fox and a quail. The only difference is this ; The 
fox wishes to live by eating the quail. One class of men 
wish to live by eating the fruit of other men's labor. In 
both cases, one animal has a view of his interests different 
from the opinion of the other animal. 

No progress can be made in the settlement of any ques- 
tion until the fundamental facts and principles are recog- 
nized, just as they are. Nothing is gained by assuming a 
state of things which has no existence. We must recog- 
nize that a hog and a man have many traits in common, 
before we can make substantial' progress in adjusting the 
relations of capital and labor. Moreover we must remem- 
ber that the selfishness of all classes needs restraint. 
Whether a person be a capitalist or a poor day laborer, he is 
always simply a man. 

WHY LAWS WERE CREATED. 
In an open fight between persons or parties of unequal 
strength and power of endurance, the probabilities are that 



NECESSITY OF LA W. 



389 



the weaker must inevitably succumb to the stronger, no 
matter what form of contest may take place. It therefore 
necessarily follows, that in all forms of war the few strong 
will become masters of the many weak, by beating them 
one by one. But by combining together, the numerous 
weak can create a force capable of controlling, and if need 
be, subduing the small number whose individual strength is 
above the average; and who, if left "free " to follow their 
own inclinations, will surely encroach upon the rights of 
others, weaker or less cunning than themselves. Such a 
combination states what it deems equitable between man 
and man, and most conducive to the best interests of the 
whole community. These statements are called " laws," 
and are made in a negative form. Instead of defining the 
conduct that centuries of experience have pronounced the 
best, laws are enumerations of acts which the aggregate 
wisdom of mankind have found adverse to the well-being of 
society. All conduct and acts not thus designated and pro- 
hibited by various penalties being attached to their commis- 
sion, are presumed proper to pursue and commit. 

WHY LAWS SHOULD CONTINUALLY CHANGE. 

The enormous amount of legal literature in the world has 
grown from the action of two forces. First. The necessity 
of devising some means to prevent individuals with unusual 
strength, cunning and selfishness, from preying upon the 
rest of society. Legislation has been enacted for the pur- 
pose of encouraging such persons to devote their energies 
to harnessing the forces of nature in the service of man- 
kind, and thus creating new wealth ; and discouraging them 
from acting the part of beasts of prey, and, in a great va- 
riety of ways, living on the wealth created by and justly 
belonging to other persons. 

Second. The continual changes in the conditions sur- 
rounding mankind incident to their increase in numbers, and 
growth in knowledge of morals, science and art, have inces- 
santly created new and different opportunities for men to 
plunder and oppress each other. Many laws well adapted 



390 



SOCIAL STRUGGLES. 



to restrain and regulate the conduct of mankind a thousand 
years ago, would be of no service now. We have outgrown 
them. New conditions have arisen which those who en- 
acted the ancient laws did not have before them ; and, 
therefore, by no possibility could frame laws suitable for the 
development of a human intelligence, and a state of society 
of which they had not the faintest conception. 

The principle underlying all laws fit to be made, is pre- 
cisely the same in all ages of the world ; viz., the encourage- 
ment of virtue; the discouragement of vice. But the means 
best fitted to carry out this principle must be adapted to 
the conditions under which a society governed by law ex- 
ists. As these conditions are constantly changing, unless 
the laws change with them, they become more or less inop- 
erative, and often become instruments of oppression ; thus 
reversing the result for the attainment of which they were 
originally enacted. TJie development of law should therefore 
keep pace with the development of man. Those who resist 
changes in laws, no matter to what subject those laws relate, 
are resisting human progress. They are endeavoring to 
keep a growing and developing world clad in the garments 
which it has outgrown. 

CONTENTION BETWEEN LABOR AND CAPITAL SHOULD 
BE SETTLED BY LAW. 

Therefore the best way to adjust the contention of cap- 
ital and labor is a resort to what centuries of experience 
have shown is the best mode of settling all other kinds of 
strife which grow out of the tendencies of human nature; 
viz., legislation adapted to the existing conditions. A con- 
siderable portion of our laws relative to finance, labor and 
capital are unfited to our present stage of development. 
The discoveries in science and inventions in art which have 
recently occurred, have wrought great changes in our modes 
of creating and distributing wealth. As an inevitable re- 
sult, the laws created with reference to former conditions 
are unsuitable, do not conform to the facts, and are inade- 
quate to meet the requirements of the present state of affairs. 



WIIA T LA W DOES. 



ORIGIN OF LAW. 



391 



In past ages there was little law. The strong could, and 
did abuse, rob and enslave the weak with impunity. Law 
began when two or three comparatively weak men combined 
to resist the injustice and wrong of one stronger man. The 
slowly growing reign of law has displaced anarchy with 
order. Man's tendency to use superior physical strength for 
the purpose of plundering physical inferiors has been curbed 
to a great degree by laws directed against such practices. 
It has also partially protected the mentally weak from the 
selfishness of the mentally strong. The pecuniarily weak 
are likewise partially protected from the rapacity of the 
pecuniarily strong. Schemes to commit robbery without 
overt violence, to a considerable extent are placed under 
the ban of the law. 

FURTHER PROGRESS IS NECESSARY. 

But we need to take further steps in the direction we have 
been traveling for thousands of years. Our laws must be 
altered to conform to our altered conditions. True conserv- 
atism consists in constantly maintaining and preserving the 
proper equilibrium of the various portions and forces of 
society. This can only be accomplished by so changing our 
social and legal machinery as to keep them constantly 
adapted to our industrial, intellectual and moral develop- 
ment. If we would, we cannot arrest the progress of man- 
kind. We must recognize it as a fixed fact and conform 
our institutions to supply its steadily changing needs and 
demands. Therefore, before we can intelligently devise 
means for curing the present contention between capital 
and labor, we must first study the changes which have oc- 
curred in the conditions under which those two forces are 
placed. Meanwhile, we should repress all conduct which, 
although apparently peaceable, savors of violence, because of 
its being a summary disturbance of existing conditions. 
We should hasten slowly. The natural and safe method of 
social development is to cautiously take only one forward 



392 



SOCIAL STRUGGLES. 



Step at a time. A law should prevail in every State which 
would prevent an employer from discharging or reducing the 
wages of a regular employee, without first giving thirty days' 
explicit notice thereof. The same law should prevent an 
employee from demanding a higher rate of wages, or quitting 
work without first giving his employer thirty days' notice of 
such intention. Such a measure would prevent either party 
from being taken by surprise, as often now happens. By 
affording time for reflection and discussion, it would avoid 
much ill feeling, as well as pecuniary losses to both sides. 

OUGHT EVERY MAN BE ALLOWED TO DO AS HE 
PLEASE ? 

In the outset of considering what measures to adopt in 
order to create and preserve the proper relations between 
capital and labor, the question arises : What end should 
be sought by legislation ? 

Much affectation of " science " is made by the advocates 
of "free trade " and " let alone." It is claimed that these 
doctrines are right because they are in harmony with the 
great natural law of the " survival of the fittest" ; and, if all 
legal restraints were removed, each man and each nation 
would naturally take the place designed for him or it. 
These persons think all usury laws should be repealed, the 
lender allowed to charge whatever interest he can get, and 
that no tariffs should exist to protect weak manufacturers 
from established and powerful monopolies. 

Volumes of so-called political economy have been written^ 
based on the idea that there should be " unrestricted free- 
dom of action " between men to make whatever bargains 
could be made, and that such contracts when made should 
be enforced by the whole civil and military power of the 
nation. 

The principle underlying these doctrines ignores all moral 
obligations of one man, or one nation, to another. It is the 
brute idea that the fact of one man, or body of men, having 
superior mental, physical or pecuniary power confers on 
that man, or that body of men, the natural right to use that 



THE GOSPEL OF ANARCHY. 



393 



power for his, or their selfish purposes, regardless of the suf- 
ferings thereby inflicted on weaker men or weaker nations. 
If this principle be correct, the slave-holders were right. For 
if one race have superior power to another, why not allow 
them to use that power as to them appear best for their 
own interests ? " The interests of the weak and the strong, 
of labor and capital are identical. Why then not tnisi the 
strong to do as they think best zvith the iveak ? Why not let 
nature take her course ? " 

A shark wants " unrestricted freedom," as he under- 
stands it. The same is true of tigers and all other beasts and 
birds of prey. A wolf does not want to be " limited " to 
the amount of mutton necessary to a meal — he wants " un- 
restricted freedom " to slaughter and suck the blood of a 
score of sheep at once. Men whose superior physical, in- 
tellectual or pecuniary strength, give them advantages over 
their fellows are prone to desire " unrestricted freedom," 
and often to unconsciously persuade themselves that the 
doctrines of the fishes of the sea are true political economy- 
Carried to its logical conclusion, the doctrine of " unre- 
stricted freedom " is the gospel of anarchy. Its advocates 
stop at what they call the " police line." But if such ideas 
be true, why should we have police? Why not let every 
one take care of himself and enforce his own rights without 
calling on others for help ? Why should a person holding 
such views call on the civil authorities to enforce the con- 
tracts he may have made with others ? Furthermore, if a 
person have a natural right to "unrestricted freedom" has 
he not the right to cancel a contract whenever he thinks his 
interest would be promoted by so doing ? 

If we admit these notions, it follows that universal suf- 
frage is wrong. A few men should be allowed to seize and 
hold the reins of power. It also follows that a strong na- 
tion has a perfect right [as England has repeatedly done] 
to reduce weaker nations to industrial, commercial and pe- 
cuniary servitude. It further follows that the weaker men 
and nations have no natural right to use such defense as 
may be had by legal organization or by combination with 



OQ^ SOCIAL STRUGGLES. 

each other. They should quietly submit. " Why were some 
men made stronger in body or mind than others, if they 
have no right to use their strength as they see fit?" 

These ideas, incorporated into deeds are, in fact, a return 
to barbarism — to the selfish principle of " every man for 
himself." It is none the less so, because the proposition is 
to spoliate by the weapons of trade and law instead of the 
old method of open robbery by physical force. Wealth 
got by usury ; by legislative changes of contracts, such as 
the Coin Act and the demonetization of silver ; by oppres- 
sive uses of capital in form of monopolies ; or, by hard bar- 
gains of any kind wrung out of the necessities of those 
whose circumstances force them to submit, is obtained by 
the same spirit which actuated the petty chiefs of the Mid- 
dle Ages when they sallied forth with armed retainers to 
plunder a fertile valley. Robbery by the means " respect- 
able " in the nineteenth century, is as criminal as robbery 
by the modes which were " respectable " in the ninth cent- 
ury. 

A DANGEROUS DOCTRINE FOR THE RICH TO PREACH. 

At first sight, it seems to the interest of the rich, the cun- 
ning, the strong and the skillful to have all restraints upon 
their conduct removed. But there is another side to the 
doctrine that "the strong should be free to follow their own 
instincts," and that it is best to " let every one follow and 
gratify his ambition in his own way." The moment the 
doctrine is fully established and understood that superior 
power to do or carry out a particular thing or policy con- 
fers a just and natural right on such person or persons to so 
act, the capitalists of the country are in immediate danger 
of having their property taken from them by laws backed 
by physical force. The number of the rich capitalists is 
small compared with the rest of the population. Suppose 
the laboring classes should say to them: "You say that 
might gives right ; we accept your doctrine and -challenge. 
Although a hundred of your number have greater resources, 
and therefore are stronger than a hundred of us, yet we can 



THE TRUE DOCTRIiVE. 



395 



exceed your strength by a combination of our superior num- 
bers. We will combine at the polls and make laws which 
will show you that if superior strength give privilege, 
we have the right to control your property, just as you 
have heretofore controlled our labor." 

The danger of the doctrine of " freedom of contract " 
between man and man, is not an imaginary one. It is true 
there is no danger to the few capitalists who act on such a 
doctrine so long as the masses of voters can be hoodwinked 
by false cries, as they have often been heretofore. But 
that this cannot be repeated indefinitely is perfectly certain. 
Sooner or later the laboring classes will more fully under- 
stand their power, and will mostly vote as a class, and then 
the evil of the aforesaid false doctrines will appear to those 
who now exalt them into high moral principles. 

The true doctrine is that neither power of wealth nor 
power of numbers should be used to perpetrate wrong or 
injustice toward any person or class whatsoever, 

" These things I command yoii, that ye love one another ^ 

WHAT SHOULD BE. 

Statistics have been adduced to show that the masses 
ought not to complain of the present hard times because a 
laborer can now obtain more of the comforts of life for a 
week's wages than he could fifty years ago. But why stop 
at fifty years? Compared with five hundred years ago the 
people are highly prosperous and get high wages to-day. 
Compared with the dark ages, the common laborer can now 
live like a prince ; — he can have glass in his windows; — can 
have books, newspapers, and a hundred other things which 
were then almost unknown. A thrifty mechanic who owns 
his homestead can now live in a style far superior in many 
respects to that of Henry VIII. of England. 

We can now raise wheat, corn and other farm products 
with less labor than before the invention of the present 
perfected farming implements ; but that constitutes no rea- 
son why the profit and advantage of this increase of knowl- 
edge should go to a few rich persons instead of benefiting 



39^ 



SOCIAL STRUGGLES. 



the farmers themselves. We can manufacture cloth and a 
great number of other necessaries and comforts of life with 
more ease and less labor than was formerly required to make 
a poorer quality ; but that forms no reason why the ma- 
chinery of to-day should benefit only a few. If the doc- 
trine that the masses should now be content to work as hard 
and fare 'as rudely and poorly as their ancestors did fifty or 
a hundred years ago, be true, then it logically follows that 
they should be willing to go still further back ; to return to 
the barbarism when mankind lived in rude huts, were clad in 
the skins of beasts, had none of the comforts of civilization 
and were almost destitute of education. This they should 
be contented to do, in order that a favored few should mo- 
nopolize all the results of the toil and thought of a hundred 
generations. 

RISE OF RENTS. 

More of many of the various necessaries and comforts of 
life can be bought with a week's wages now than could be 
had for the same labor two hundred years ago. But it 
is also true that as a general rule rent costs enormously 
more now than then. In fact, a large portion of the aver- 
age workman's wages is absorbed in payment of rent, and 
this goes on accumulating against him when he is idle. The 
great rise in the value of land in cities is the chief cause of 
crov/ded tenements, insufficient light and air, and other 
evils. Large numbers of workmen live upon land for which 
a rent must be paid out of all proportion to their wages. 

The question is often asked : Why do not the workmen 
in cities live in the suburbs where rent is cheaper? Partly 
because they cannot afford to. Most workmen cannot begin 
work at nine o'clock, as some other classes do. They must 
be at their place at seven o'clock in the morning, and remain 
until six in the afternoon. The cost of fare and time would 
be usually greater than the increased rent of a tenement 
nearer the workshop. 

The problem of supplying workmen with comfortable 
homes at a moderate cost, from which their work can easily 



NEED OE CHEAPER RENT. 



397 



be reached, chiefly involves four things. First : the spread 
of our cities over larger areas of land ; thus moving shops 
to open spaces where land is cheap. An obstacle to this, 
and a very serious hinderance to better social and sanitary 
conditions among mechanics and factory operatives, is the 
fondness of many of them for living in the most central 
and densely populated section they can find. Measures 
should be taken to discourage the herding of great numbers 
within narrow areas, and to encourage the supply of each 
family with abundance of air and sunshine. These agents 
disinfect the moral as well as the physical atmosphere. 

Secondo Greater facilities for cheap and rapid transporta- 
tion of goods and passengers from one portion of a city to 
another. This can be furthered by the municipalities mak- 
ing a wiser use of the street franchises. 

Third. A reduction of the price of rent. This depends 
largely upon a reduction of the rate of interest paid for the 
use of money. Another important fact is that the rent of 
the cheapest grade of tenements would be from ten to twenty 
per cent, lower, if their occupants would learn, as far as 
possible, to do precisely as they agree, and take good care 
of their landlord's property. 

HOURS OF LABOR. 

Fourth. Reduction of the time of labor to nine hours a 
day. This would be allowing a half hour in the morning 
and evening for the workman to go to and from his work. 
But it should be borne in mind that the number of hours a 
man should work in a day depends somewhat on the num- 
ber of such days' labor in a year. Those whose labor is 
uninterrupted, month after month, cannot advantageously 
work as many hours in one day as those who have frequent 
periods of idleness. 

The total amount of work which a man shall perform in a 
day and the number of hours he shall be engaged in labor 
are two distinct things. By incessant and rapid labor for 
eight hours more work may be accomplished than by more 
leisurely labor for ten hours ; and the strain upon the phys- 



398 



SOCIAL STRUGGLES. 



ical strength of the laborer occupied for ten hours may be 
much less than that upon him compelled to severe exertion 
for eight hours. Therefore, the most we can say about the 
relative tax on a laborer's energies from working eight or 
ten hours per day, is that, other things being equal, ten hours' 
labor are a severer tax than eight hours' labor. Such prob- 
lems, like many others, depend on circumstances and facts 
for their proper solution. 

If a man must do a certain amount of work in a day, what 
number of hours can most advantageously be devoted to its 
performance? It is certain that the total amount of labor 
exacted of a workman daily should not be so great as to in- 
jure his health, or his reasonable enjoyment of life. This 
implies moderate labor for such portion of time as will leave 
him ample time for sleep and a reasonable opportunity for 
recreation and self-improvement. 

A reasonable division of the twenty-four hours is nine 
hours' labor, nine hours' sleep,* three hours for meals and 
incidental time, and three hours for recreation and improve- 
ment. If such a system be followed continuously a large 
amount of work can be performed in a year. It is the 
uninterrupted labor which shows the greatest results. 
Spasmodic industry produces comparatively little. Of 
course, such a division of time is entirely impracticable for 
farmers, sailors, and many other classes of workmen whose 
hours of labor are largely dependent on the vicissitudes of 
the weather and upon the peculiarities of the work to be 
performed. 

COMPARISON WITH A HUNDRED YEARS AGO. 

It is undoubtedly true, that if a mechanic earning the 
average wages now paid were to live in the style mechanics 
lived two hundred, or one hundred years ago, he could, in a 
few years, save money enough to buy a building lot and 

* An enormous amount of insanity and various other forms of nervous 
disease are due to insufficient sleep. As a general rule, each person 
should have all the time for sleep that he is able to sleep, without spe- 
cial reference to the number of hours so occupied. 



CAUSE OF DISCONTENT. 



399 



erect a cottage of his own. But those who ponit this out 
forget that the man of to-day is surrounded by circum- 
stances entirely different from those which environed his 
ancestors. An ox is contented when he has plenty of food, 
drink and a comfortable shelter from the cold. What other 
oxen may or may not have makes no difference with his 
contentment. 

A man's nature differs from that of an ox. His content- 
ment depends as much upon what his associates have as 
upon what he has himself. Those who served in the 
civil war can remember the many times when thousands of 
men, accustomed when at home to comfortable and luxu- 
rious quarters, lay down to sleep in the mud, or on the 
frozen ground, without complaining or murmuring. This 
was largely so because all fared alike. If part of the army 
had been supplied with hair mattresses, resting on springs 
and placed in warm dry rooms, while the rest lay out in the 
snow or mud, there would not have been the cheerful resig- 
nation to the situation that there was. 

If a mechanic should now live as plainly and poorly as 
his ancestors did two hundred years ago, he would find him- 
self in a very uncomfortable position. His house, furniture, 
food and clothing, and his wife's and children's clothing, 
would be the subject of constant and annoying remarks. 
They would be socially ostracized and made a subject of 
jeers and ridicule; and unless constituted differently from 
the majority of persons, life would be a constant round of 
vexation and annoyance to them. 

It does not allay the discontent of a man who feels that 
he has not his fair share of the growing wealth of the world, 
to recite to him the different ways in which he is better off 
than his ancestors were. He has a feeling that his ances- 
tors, in one important respect, were far better off than he 
is : viz., a greater equality, in style of living, with employers. 
Everything in this world is compared with something else. 
Therefore it is futile to attempt to convince mechanics or 
laborers that they are fairly dealt with, by simply pointing 
out how such persons formerly fared. Their present posi- 



400 



SOCIAL STRUGGLES. 



tion, compared with that of men who Hved one or two 
hundred years ago, is of no account to their minds, because 
it is live men, and not dead ones, with whom they wish to 
be on a footing of greater equality. 

IS EQUITY BEING DONE? 

The question, therefore, is not whether labor gets a 
greater reward now than it formerly did. After that is 
conceded, the difificulty is as great as ever. Labor insists 
that capital gets more than its relative share of the wealth 
created by combining labor and capital with the discoveries 
and inventions of science and art. If this be true, then it 
follows that labor is being defrauded of its just share in 
the glorious progress of the human race. 

It must be remembered that our social and legal policy 
should be framed on the maxim that justice is always ex- 
pedient. The permanent interests of capital are safe, just 
in proportion as labor is equitably rewarded. 

We should seek the advancement of HUMANITY ; — not 
simply that of a few, but of the HUMAN RACE. The enor- 
mous progress we have made in science, invention, and me- 
chanical art and skill, is rightfully the heritage of the whole 
PEOPLE; it should be used for elevating the masses by light- 
ening the burden of drudgery — providing more physical 
comforts and better sanitary conditions ; and by affording 
more leisure, opportunity and means for intellectual im- 
provement. 

It is sound public policy to encourage industry and the 
accumulation of wealth. Those who are lazy, improvident 
and wasteful should suffer the natural result of bad con- 
duct. But at the same time, we should create the same 
checks to prevent an unscrupulous and inordinate use of the 
money-making power that we have already placed on the 
misuse of physical power. 



FREE CONTRACTS. 



401 



FREE TRADE IS POSSIBLE ONLY WHEN BOTH PARTIES 
HAVE LIBERTY OF CHOICE, 

Many persons suppose that a bargain is voluntary, when 
made without either party thereto being under compulsion 
from some threatened legal penalty or some form of phys- 
ical violence. Such a contract is presumed to be a " free 
trade," mutually advantageous to both parties, with which 
it is both impolitic and wrong for Government to interfere. 
But very little investigation is required to discover that 
one man may compel another to make a grossly unjust bar- 
gain, without exercising, or threatening either legal or phys- 
ical force. And this may be done either when commodities 
are bartered, when goods are bought and sold for money, 
or when labor is hired. A makes an unfair bargain when- 
ever he uses the peculiar relations which he bears to B, for 
the purpose of getting the money, the goods, or the labor 
of B for a much smaller equivalent than would have had to 
be given if B were not crippled by circumstances which 
placed him at a great disadvantage. It may be more ad- 
vantageous to B, to make such a bargain, than to bear the 
losses and suffering unavoidable in case no such bargain 
were made ; but this fact may exist and still the bargain 
be grossly unfair and oppressive to B. 

The manufacturers of a city are making fair profits at the 
existing scale of prices and wages. Suppose under those 
circumstances they combine and suddenly reduce the wages 
of operatives five per cent. Such a reduction may appear 
insignificant, but, in the aggregate, where thousands of hands 
are employed, it makes a great difference in the manner the 
wealth created by them shall be distributed. In such case, 
it may be said that if the workmen are not satisfied they 
are " free " to get employment elsewhere. But although 
nominally such freedom exists, the workmen have not a per- 
fect liberty of choice. A large number of them have no 
alterriative employment and lack the means to remove them- 
selves and families to another place. Even those who are 
able to emigrate cannot do so without leaving associates 
26 



402 



SOCIAL STRUGGLES. 



and friends. Furthermore, the expense of traveling in 
quest of employment, and of removal after it is found may- 
be a greater loss than the reduction of wages. 

HOW WORKMEN MAY ROB EMPLOYERS. 

On the other hand, circumstances may and often do exist 
in which workmen, already in receipt of fair wages, may 
combine, and, without an hour's notice, demand an increase 
of ten per cent, or more in their wages. The manufactur- 
ers have then two alternatives presented to them, either one 
of which involves not merely a loss of possible profits but 
an actual loss of accumulated capital. If the workmen's 
demands are not acceeded to, and the factory consequently 
closed, there is a loss of the interest of the capital invested in 
buildings and machinery, and a serious damage to business 
from its interruption. When the manufacturer is heavily 
in debt, as is often the case, these losses are very hard to 
bear. If the manufacturer conclude that the additional 
wages demanded will damage him less than to stop work» 
he is then also certain to lose from two causes : the addi- 
tional wages and the inability to fully compete with other 
firms, situated in places at a distance where wages have not 
been raised. 

Suppose the hired farm laborers in a wheat-raising sec- 
tion of the country should quietly keep at work until the 
wheat was fully ripe and then demand double the usual har- 
vest wages. The farmers would pay it because they would 
otherwise lose still more than the extorted wages. But 
would this be a free contract ? Would any bargain or trade 
made under similar circumstances be " voluntary " in the 
proper sense of the term ? 

WHEN FREE TRADE OCCURS. 

Freedom of contract and trade, alike between individuals 
and nations, is only possible, as a general rule, when both 
parties occupy ground and positions which give them a 
reasonable equality of strength, and power of self-protec- 
tion. Neither an individual nor a nation has much chance 



I 



SOURCE OF LAW. 



403 



to make an equitable bargain when in urgent necessity of 
making one on some terms. The proverb, " Necessity 
never makes a good bargain," is a condensed statement of 
human experience in regard to trades and contracts made 
Avhen one of the parties has a great advantage in some way 
over the other. 

When both parties to a bargain of any kind, are benefited 
thereby to nearly an equal extent, the exchange is both free 
and fair. But where one side gets nine-tenths of the profit 
of the transaction, and the one-tenth profit to the other side 
is profit only in the sense that it is a means of averting a 
portion of an expected loss, neither a free trade nor a fair 
trade has been accomplished. Such a bargain is evidence 
that one of the parties thereto had " liberty of choice and 
action " only in the narrow sense that he could choose be- 
tween one sacrifice and another and a still greater one. 

WHAT A GOOD BARGAIN IS. 

As a general rule, both individuals and nations in their 
dealings are constantly endeavoring to gain an unfair advan- 
tage over each other. What is commonly called " a good 
bargain " is usually an exchange wherein the advantage 
thereof is nearly all on one side. Trade and commerce are 
not carried on from benevolent motives. 

LAWS ARE OUTGROWTHS OF HUMAN NECESSITY. 

Law originated because human experience saw the abso- 
lute necessity of some orderly means of restraining the cu- 
pidity and selfishness of mankind. Laws are therefore sim- 
ply an expression and outgrowth of public necessity. It is 
practically impossible for a government to inquire into the 
right and wrong of every transaction which occurs between 
the different individuals under its jurisdiction. It is like- 
wise impracticable for it to take cognizance of all the bar- 
gains made between its own citizens and the citizens of for- 
eign nations. But, at a very early period in the history of 
our race, the need became apparent of adopting some gen- 
eral measures the tendency of which would be to prevent 



404 



SOCIAL STRUGGLES. 



one man from taking advantage of the necessities of another 
to make with him a grossly unfair bargain. Out of this 
belief grew the first laws. It was next observed that simi- 
lar measures were necessary to prevent foreigners from un- 
fair dealings with citizens. This was the germ, at once, of 
the first international law and the first tariff. For century 
after century, these rudimentary ideas have slowly developed 
into systems of jurisprudence, and have found expression in 
a great variety of ever changing laws. The wisdom and 
expediency of the form of many of these laws are still under 
active debate. But, that it is as legitimate a function of 
government to prevent unfair bargains as to prevent robbery 
or burglary, is a principle fully established. The only ques- 
tion is : What are the best practical means of accomplishing 
such a purpose? What measures should be adopted, at a 
given time and place, to promote and secure freedom of 
contract and fair dealing between citizen and citizen and be- 
tween citizen and foreigner, depends entirely on the at- 
tendant circumstances and conditions. Laws wise, suitable, 
and effectual in one age and country, and under one combi- 
nation of facts, may be at once foolish and futile at another 
time or place and under different circumstances. Laws 
made without reference to existing conditions are always 
acts of folly, and usually acts of injustice ; simply because 
the paramount end of legislation can never be reached un- 
less the law fits the facts. Facts cannot usually be made 
to fit either newly-made laws, or laws made long before and 
under a different state of affairs. 

SIEGE OF PARIS. 

A striking illustration of the foregoing principles was fur- 
nished a few years ago by the siege of Paris. The prices of 
fuel, flour, and other necessaries of life in that city are usu- 
ally left to the action of competition in open market between 
the owners of those things. But, when the German armies 
encircled the city, it was at once evident that the different 
conditions necessitated a different means of regulating prices. 
The Government fixed prices by law. Otherwise, those who 



TRUE TEST OF LAWS. 



405 



chanced to have in possession a large stock of imperatively 
needed articles could have taken advantage of the situation 
to obtain unfair prices. The laws adapted to the ordinary- 
times of peace were not suitable when the city was placed 
under different circumstances. 

WHEN LAWS NEED REVISION. 

It may be said that a siege is an exceptional thing. But, 
in fact, the principles involved when a change of circum- 
stances occurs in a sharp, vivid manner do not differ from the 
principles which should guide us when circumstances change 
so slowly as to attract little attention from ordinary observers. 
It is the fact of a change of conditions which is the just basis 
of a corresponding change of measures to secure fair bar- 
gains. Whether this change has been rapid or gradual in 
itself, is immaterial. The vital point, which justifies legal 
interference, is that events have caused such a divergence 
between existing laws and facts that the object of law is no 
longer attained. 

TEST OF THE WISDOM OF A LAW. 

The wisdom and justification of a law intended to prevent 
one man from taking advantage of his position to make a 
nominally " free," but really compulsory bargain with an- 
other man depends on its fulfillment of such a purpose. If 
it does not tend to do so, no further evidence of its want of 
adaptation to existing facts is needed. If it have such a tend- 
ency, its value is not impaired because adverse to the theory 
that '' every man has a right to make such bargains as he 
pleases." Such an inherent right does not exist. Individ- 
ual liberty must always be subordinated so the general good 
of society, and, consequently, one man has no right to com- 
mit acts, even with his own property, which are contrary to 
public policy. 

What is true in regard to the regulation of trade between 
citizens of the same country, is equally true in regard to 
trade with foreigners. Tariffs and similar measures are jus- 
tifiable when they prevent citizens of one nation from tak= 



4o6 SOCIAL STRUGGLES. 

ing advantage of their position to make unfair trades with 
the citizens of another nation. Such trades may be nomi- 
nally " free " ; yet, like many bargains between citizens of 
the same country, they may be in reality compulsory and 
contrary to the interests of one of the nations. 

Whether a nation needs a tariff, and, if so, upon what ar- 
ticles and at what rate, depends, like the enactment of other 
laws, upon the existing circumstances. It may be to the 
interest of one nation to have no tariff whatever upon cer- 
tain articles. At the same time, another nation may find 
great advantage from placing a tariff on the very thing 
which elsewhere is admitted free of duty. If all mankind 
were perfect, no laws would be needed. The wisdom and 
justice of an act always depend upon the circumstances 
and conditions under which it is committed. Tariffs are 
not excepted from this universal law. The imagined " pro- 
found and complex economic laws " underlying foreign 
trade vanish into idle vagaries whenever we clearly remem- 
ber that bargains between nation and nation need regula- 
tion for the same reasons that bargains between citizens of 
the same country need legal restriction. 

Note. — The value of labor, like that of all other things, depends upon 
circumstances ; upon when, where and how it is performed. Aside from 
his physical strength and endurance, the value of an employee depends 
upon his punctuality, faithfulness and skill. The actual worth of different 
men's services varies greatly, and employers justly feel wronged when 
virtually compelled, by labor organizations establishing too high a mini- 
mum price, to pay a poor workman the price of a good one. Such a 
procedure is also a gross injustice to the best workmen. Labor socie- 
ties might divide their members into grades for each of which different 
wages were asked. This act of simple justice would, in reality, harm 
none and benefit all. 



CHAPTER XVIII. 

Remedies for Social Conflicts.— Legislation should Foster Equality of 
Wealth. — Measures should be General, in Preference to Special. — 
Potency of Money. — Evils of Waste. — Foolish and Wasteful Brutal- 
ity.— Bad Modes of Building. — Many kinds of Waste. — Taxation. — 
How Taxes should be Levied. — What a Tariff is. — Taxation should 
always be Laid with a Twofold Purpose. — Advantages of Indirect 
Taxation. — Corporations. — One of the main Roots of the Labor Ques- 
tion.— Ownership of whatever performs Labor is Ownership of La- 
bor. — A Fish-hook Machine. — A Man should Control his Means of 
Subsistence. — Need of a large Amount of Capital. — Inventions 
should not be made Means of Oppression. — How Inventions are 
Made. — All should be Benefited by Discoveries and Inventions. — 
Growth of Inequality. — What should be Done. 

Nothing is more fallacious than the assumption that t lie 
yniitual interests of a landlord and a tenant, a lender and a 
borrozver, a seller and a buyer, and an employer and a servant, 
are coincident and identical. 

The details of measures to adjust the business relations 
of one person with another, and to equitably settle the 
diverse claims of capital and labor, do not lie within the 
scope of our present inquiries. But the general principles 
which should direct their formation may be briefly dis- 
cussed. 

" Give me neither poverty nor riches ; feed me with food convenient 
for me : Lest I be full and deny thee, and say, who is the Lord ? or lest 
I be poor and steal, and take the name of my God in vain." 

This ancient prayer regarding the distribution of wealth 
should underlie our legislation. And we must remember 
that the laws of a nation, more than any other one agency, 
determine into whose hands, and in what proportion, the 
wealth of that nation shall be placed. 

407 



4o8 



SOCIAL STRUGGLES. 



LEGISLATION SHOULD FOSTER EQUALITY OF WEALTH. 

The chances of national security, prosperity, and happi- 
ness are much greater for a country where the vast majority 
are in comfortable circumstances, than for a nation with 
great wealth in few hands and a large population of paupers 
and other persons deprived of many comforts of life and on 
the verge of abject want. 

In order to produce this desirable condition of equality 
in enjoyment of the necessaries of life, the social forces and 
national policy should be so organized and directed as to 
restrain the avarice of those who, in the absence of law, 
would appropriate to themselves a greater amount of wealth 
than either justice or expediency sanction. 

Laziness and wastefulness should be discouraged and 
incentives given to economy and thrift. Every citizen, no 
matter how weak, ignorant, poor or humble he may be, 
should be made to feel that, although individuals may seek 
to oppress and wrong him, yet society, as a whole, the State, 
expressed by the strong arm of legislation, is ever his kind 
and sympathizing friend. Under such conditions social 
order rests on the broad foundation of the affection and 
loyalty of the masses of the population and cannot be 
shaken. 

MEASURES SHOULD BE GENERAL, IN PREFERENCE TO 

SPECIAL. 

In devising means to accomplish the aforesaid desired 
results, we should draw a lesson from Nature and imitate 
her mode of law-making. Her laws are neither petty, spe- 
cial nor complex. They are broad, general and simple. 
Our limited capacity prevents us from ever equaling their 
wisdom ; the best we can do is to be guided by the general 
ideas upon which natural laws appear to rest; viz., funda- 
mental facts and principles should be so conformed to, that 
a few laws will enable multitudes of living things to success- 
fully accommodate themselves to an infinite variety of 



A FEW THINGS GOVERN MANY. ^qo 

changing conditions. The Creator of natural laws has 
solved this problem completely. 

Whoever inspects a large workshop may see a great 
number and variety of machines performing different acts 
and services. Suddenly the hum ceases, and in a few mo- 
ments all the complex mechanism is at rest. A slight pres- 
sure by a single hand has detached the power which turned 
the shaft whose motion set a hundred machines at work. 

The social fabric is like a workshop. A great variety of 
results flow from the action and influence of a few elemen- 
tary forces. The whole social system may thus be swayed, 
so silently and quietly, either for good or for evil, that the 
source of the power which has such a controlling influence 
is unnoticed. The relations of capital and labor are so com- 
plex and numerous that most persons imagine a multitude 
of regulations necessary to secure their proper adjustment. 
But many things depend largely upon the influence exerted 
by a few. Therefore, we should devote our studies to the 
regulation of those few things which give a controlling bias 
and tendency to the many things. Some of these rudimen- 
tary forces we will indicate in the order of their relative 
importance. 

POTENCY OF MONEY. 

First. In the absence of barter, money is the link by 
which capital and labor are associated. As the growth of 
commerce and commercial habits have rendered barter to a 
large extent impracticable, the relations of labor and capital 
are dependent more upon money than upon any other one 
thing. A currency convenient to use, difficult to counter- 
feit, and of uniform value, therefore, lies at the very foun- 
dation of commercial and industrial activity. The ideal 
'* dollar " never changes in value. The class that controls 
the money of a nation can control and order, to a large ex- 
tent, how the wealth created by the association of capital 
and labor in that nation shall be divided and apportioned. 
This silent and generally unnoticed influence can be used in 
two different ways, or, by both those means simultaneously. 



410 



SOCIAL STRUGGLES. 



First. It may be done by raising or lowering prices. Sec- 
ond. It may be accomplished by changes in the rate of in- 
terest. The rate paid for the use of money is therefore 
closely interwoven in importance with stability cf its pur- 
chasing power. These topics are elsewhere further consid- 
ered. 

EVILS OF WASTE. 

Second. A cow that gives a pailful of milk and immedi- 
ately kicks it over is not a desirable member of a dairy. 
Capital destroyed as soon as created differs widely in effect 
upon the community from capital put to good and produc- 
tive use. If a political party squander a comparatively 
small sum the whole country is aroused. But the millions 
of individuals who compose this nation are constantly en- 
gaged in wasting, in a great variety of ways, more wealth 
annually than is required to defray the entire expenses of 
the national government. 

The manufacture and sale of intoxicating liquors involve 
an annual waste of hundreds of millions of dollars' worth of 
property. The loss inflicted by converting valuable grain 
into maddening drinks is alone very great : but that is only 
the first of a series of acts, each one of which has a terrible 
tendency to make more inmates for the almshouse, the luna- 
tic asylum, the police-station, and the penitentiary. A large 
portion of the expense of maintaining order, especially in 
cities, is due to the almost incredible amount of wealth 
wasted in various ways by drinking habits. But, in all 
probability, reform will make slow progress until wider 
adoption of the convictions of a very small, but steadily 
growing minority of the best physicians: "Alcoholic 
drinks are always an evil, both in health and sickness." 

FOOLISH AND WASTEFUL BRUTALITY. 

Tens of millions of dollars' worth of grain, fruit, and veg- 
etables are yearly destroyed by insects and worms. This is 
chiefly due to the fact that every village and city in the 
land has one or more workshops devoted to the manufact- 
ure, repair, and sale of guns, chiefly used for the purpose of 
murdering the farmer's and gardener's friends, the insect- 



WASTEFULNESS. 



411 



eating birds. An undeveloped, crude boy, without proper 
instruction, cannot be expected to know any better than 
to commit acts both brutal and wasteful. But it is humil- 
iating to read that persons of mature age and occupying 
prominent positions in society are " spending their vaca- 
tions in the sport of hunting." This means that such per- 
sons are so low in the scale of moral development and sensi- 
bility that they take a savage pleasure in witnessing the 
death agonies and struggles of innocent birds and animals. 
Large sums are yearly squandered for equipments to 
carry on this barbaric " sport." 

BAD MODES OF BUILDING. 

Every day in the year witnesses the destruction, by fire, 
of from one, to three hundred thousand dollars' worth of 
property. A large portion of this is needless waste, caused 
by ignorant and careless modes of constructing buildings. 
Since the termination of the Civil War, the value of the 
property destroyed by fire exceeds the present amount of 
national debt, and three-fourths of this vast waste could 
have been averted by reasonable precautions. 

We have wasted and are still wasting our wood and timber 
supply with utter recklessness. The direct loss thereby oc- 
casioned is very large, but it is equaled if not exceeded by 
the enormous losses from disastrous floods and protracted 
droughts directly traceable to a diminution of the proper 
amount of forests. We not only squander our wealth of 
forests already mature, but thus far have neglected to ade- 
quately protect young growing woodland from devasta- 
tion by fire. 

MANY KINDS OF WASTE. 

A score of other forms of wastefulness could readily be 
named, each one of which places a heavy and needless burden 
upon society. On the average, they make life just as much 
harder as they destroy wealth. Any cause which checks or 
diminishes the production of wealth is a waste of potential 
energy : it is just as truly wasted wealth as if it were a means 



412 



SOCIAL STRUGGLES. 



whereby wealth already in hand was destroyed.* Consider 
the enormous losses inflicted on society by ill-advised strikes, 
whereby both employer and employed are injured, and which 
a little consideration on one or both sides would have avoid- 
ed: arbitrary and unnecessary discharges of workmen, or 
some similar evidence that our social machinery is defective. 
For it should be remembered that whenever, from any osten- 
sible and apparent cause whatsoever, men, willing and able 
to work, are idle, it necessarily implies grave mistakes some- 
where. Wasteful ignorance on the part of some one, some 
class, or the whole community, must always exist, in some 
form or place, whenever hands are idle which should be 
employed in the creation of wealth. Something is wrong 
whenever the association of capital and labor is not both 
equitable and uninterrupted. 

, After strenuous opposition and exhaustive debate, it is now 
generally considered a legitimate function of Government to 

* While this is being revised, wastefulness has assumed a phase to 
which the term " boycott " has been applied. It is essentially an agreement 
by a considerable number of persons to injure the business and property of 
one person by refusing to trade with or work for him. The effectual ac- 
complishment of this purpose requires that the persons entering into such 
agreement should also refuse to hold any business relations with any one 
•who has commercial intercourse with the person whose injury has been 
agreed upon. Centuries of human experience have demonstrated the in- 
estimable benefit of a provision in the fundamental law that " no one 
shall be deprived of life, liberty or property without due process of law." 
Boycotting is in direct contravention of the long-tried principle that every 
one is entitled to an opportunity to make a full defense in a fair, legal and 
public trial, in presence of his accusers, before being sentenced to depriva- 
tion of life, liberty or property. It is a species of lynch law, by which a 
person's property is taken from him through the indirect method of in- 
juring his business. The rule of conduct is essentially the same, whether 
a number of persons agree to take a man's property by mob violence, or 
whether they agree to take his property from him through indirect 
methods. Lawlessness is the characteristic feature of all such acts. 
Boycotting may, therefore, be dismissed as an effort to improve the 
condition of the laboring classes by means at once so inexpedient and 
wrongful as to inflict swift and certain injury upon both those who make 
it and those against whom it is directed. The common sense of the 
whole community will soon revolt against it. 



NEED OF GREATER ECONOMY. ^^X 

foster and promote the diffusion of the knowledge and skill 
which will increase the productive capacity of the various 
wealth-creators of the nation. Does it not then logically 
follow, that Government should also take measures to instruct 
the people how to preserve and utilize wealth after it is cre- 
ated ? Ought we not to take another step in the path we 
have been traveling ? Our educational system would be im- 
proved, if in every high-school, academy and college one of 
the " professors " of some comparatively useless department 
were dismissed and his place filled by a teacher with common 
sense and attainments sufificient to instruct the pupils in the 
principles and art of economy. 

TAXATION. 

In the aggregate, an enormous sum of money is annually 
drawn from the pockets of the people in form of taxes. 
Within the lifetime of a man who attains three score and 
ten, the major portion, and in many cases his entire estate, 
passes through the hands of the tax-collector. That is, the 
total amount of taxation levied upon one thousand dollars' 
worth of property during his life equals that sum. It is 
certainly a moderate statement to say that the total of direct 
and indirect taxes levied on a nation during-a hundred years 
equals the value of all the property in that country. Taxa- 
tion, therefore, is a force of perpetual and enormous power. 
Its effect for a single year is not perceptible ; but, when 
levied in a particular direction, with a view to carrying out a 
certain policy, the tendency it exerts during a series of years 
is tremendous. It was the mode of taxation in France for 
a long time before the Revolution of 1789 which finally 
drove the masses of the people to desperation. 

HOW TAXES SHOULD BE LEVIED. 

The ancient idea of levying taxes was " for revenue 
only, " without reference to the incidental effect of such taxa- 
tion. This is the barbaric idea. But it is yearly more fully 
seen that taxation should have a twofold object ; viz., the 
collection of revenue and the encouragement, or discourage- 



414 SOCIAL STRUGGLES. 

ment, of certain conduct. Taxation is thus made a legisla- 
tive force ; the tax-office, a branch of Government.* 

All laws are attempts to promote a particular kind of con- 
duct and to discourage the commission of certain specified 
acts. These laws are always more or less evaded. For in- 
stance, we have laws against theft ; but it is continually oc- 
curring. 

The wisest laws cannot prevent crimes. But their tendency 
is to make such offenses more rare than they otherwise 
would be. Petty theft was formerly punished by hanging. 
But because experience has shown said policy unwise, it does 
not therefore follow that all penalties against theft should be 
abolished. 

In order to discourage men from committing certain acts 
called " crimes " we affix a penalty to their commission. 
This, for nearly all crimes, is imprisonment. But, in many 

* False and misleading issues are raised by constant reiteration and 
amplification of the proposition : " Taxation should be no greater than 
requisite for payment of the necessary expenses of government." But 
concession of the absolute truth of said proposition leaves untouched the 
actual questions before legislators ; to wit, what conduct, what interests 
shall we restrict and hamper by placing thereon the burden of paying the 
large amount of money " necessary " to defray the expenses of Govern- 
ment ? Some one must pay it. Whom shall it be ? 

A careful exploration of its ultimate results is a requisite, preliminary 
of all wise taxation. Whether the tax is proposed on imported goods, 
in form of what is called a tariff, or by any other mode of taxation is 
immaterial. The essential thing is that the effect of such taxation should 
be both to afford a revenue and at the same time place taxation on con- 
duct and interests which public policy requires shotdd be discouraged 
and burdened. 

Hence a tariff laid on a commodity, simply because it is imported and 
comes in competition with the domestic product, is not based on sound 
principles. For example, we now have a tariff on imported lumber. 
The effect of such tariff is to discourage the importation of lumber and 
to increase the destruction of our own forests, a procedure fruitful of evil. 

We shall start on the right method toward a proper system of taxa- ' 
tion, when it is fully recognized that all taxes, of every kind and nature, 
should be levied for the purpose of discouraging acts apparently benefi- 
cial to the individual who commits them, but, in abroad sense, detrimen-j 
tal to the public welfare. 



HOW TAXES SHOULD BE LAID. 



415 



cases, in order to make it still further unpleasant to commit 
crimes, a pecuniary penalty called a "fine" is attached to 
them, in addition to a term of imprisonment. To the com- 
mission of many petty crimes and misdemeanors a fine alone 
is practically attached ; that is, on payment of the fine, 
further penalties are waived. 

In essence, a " fine " is a tax levied on persons proven 
guilty of certain acts, for the purpose of discouraging them 
from repeating the offense. Thus the principle of govern- 
ing by taxation, — of attempting to prevent certain conduct 
by levying a tax on all who commit it, — is established by 
long usage. 

WHAT A TARIFF IS. 

This principle has been fully adopted, not only as a means 
of preventing criminal acts, but also for the prevention of 
certain things deemed adverse to the public interests. Thus 
from the beginning of the United States Government to the 
present time we have always levied a greater or less tax on 
many of the goods imported into this country from foreign 
nations. This tax is called a tariff. Its object has been, for 
most of the tim.e, twofold. First. Raising a revenue for 
support of the Government. Second. Preventing foreigners 
from combining their superior capital with labor degraded 
by centuries of oppression, and thus taking an unfair advan- 
tage of the workmen of this country. 

The tariff, then, is essentially a mode of taxation imposed 
for raising revenue ; for preventing the industries of this 
country being injured by competition with those of nations 
whose civilization is inferior to ours ; and for encourasring' 
the development of a greater variety of manufactures in 
this country. 

TAXATION SHOULD ALWAYS BE LAID WITH A TWOFOLD 

PURPOSE. 

What we now need is an extension of the principle of 
government by taxation. The entire revenue needed for 
the support of National, State, and Municipal Government 



4i6 



SOCIAL STRUGGLES. 



should be raised by taxes laid on conduct, the repression of 
which experience has shown best for the public welfare. 
The virtues of mankind should not be taxed. The burden 
of taxation should be laid on crime, idleness, celibacy, vain 
luxuries, avarice, and kindred vices and follies of our race. 
For example, a tax of ten dollars yearly laid on every dog 
would persuade many persons not to keep dogs. Taxation, 
in form of licenses, should be used to keep the number of 
middlemen down to the minimum required to transact the 
business of the country at the lowest possible charges. Every 
superfluous middleman and every unnecessary railroad is a 
waste of the productive energies of the nation. The silent 
but powerful influence of taxation should be brought to bear 
as preventives of all misdirection of industry.* As the 
frogs once swarmed over Egypt, so doctors and lawyers now 
abound in this country. A high license fee for practicing 
law or medicine would have a salutary effect. 

If taxation were laid for the purpose of repressing, limit- 
ing and discouraging certain things whose suppression or 
limitation is best for the public good, a correlative result 
would follow. Conduct which long trial has shown best for 
the interests of society would be encouraged by freeing it 
more or less completely from taxation. For example, it is 
greatly to the interest of society that every man should have 
a home of his own. In order to encourage the sobriety, in- 
dustry and economy requisite to obtain one, the Government 
should so collect its revenues that homesteads, of limited 
value, would be entirely free from taxation. 

* The following item of news clipped May i, 1886, shows the effect of 
taxation on business : " The number of brewers in England is decreasing 
rapidly. In 1870 there were 32,000 brewers in the United Kingdom. 
During the next decade, or up to 1880, the number lessened at a rate of a 
thousand a year, there being in 1880 only 22,000. Then in one year appears 
the surprising decrease of 7000, there being in 1881 only 15,000. Since 
then they have declined less rapidly, but are nevertheless losing ground 
none the less surely. They number now but 13,000 in contrast to the 
32,000 of sixteen years ago. The temperance movement has not made 
this change, but the levying of a duty upon beer instead of upon malt, 
which has concentrated the business in a less number of hands." 



SELF-ADJUSTING TAXES. 417 



ADVANTAGES OF CORRECT TAXATION. 

Every foot knows best where the shoe pinches. Every 
one knows his ability to pay taxes better than it is possible 
for a Government to know. Taxation should be self-adjust- 
ing. Taxes on luxuries, follies and vices give a man con- 
siderable latitude in determining how much taxation he will 
bear. He can then more easily adjust his taxes to his in- 
come than when they are laid on his home, and on other 
things which he must have. For these and kindred reasons 
a large revenue can be drawn from a nation by taxes on 
things not strictly essential to production and comfort, with 
less oppression to industry than if it were paid in form of 
taxation on indispensable things. Furthermore, the burden 
of taxation on a community, in reality, is greatly lightened 
when conduct hurtful to society is partially repressed by 
such taxation. For example, a tax of fifty thousand dollars 
laid on the liquor dealers in a city is no burden whatever, if 
fifty thousand dollars' worth of additional wealth be created 
as a result of greater sobriety, produced by lessening the 
number of rum-shops. 

CORPORATIONS. 

Fourth. The steadily growing numbers and wealth of 
artificial persons, called corporations, constitute a condition 
never before known in the world's history. Private individ- 
uals are constantly dying. In many cases their estates are 
so divided as to lose the power they exerted when used as a 
single mass by one person. But beings created by legisla- 
tion are comparatively immortal. The component members 
of the corporation are constantly growing old and dying ; 
but new members steadily fill their places. Meantime, the 
" being without a soul " often grows, and grows in wealth 
and power until its surplus revenue is alone sufficient to 
sway the legislation of a State by political corruption and 
trickery. Such a corporation is an organization of such 
vast power that there are practically only two things capa- 
ble of keeping it from using its strength for its own aggran- 
dizement, regardless of the public welfare. 
27 



4i8 



SOCIAL STRUGGLES. 



First. Its own self-interest. This often does keep a cor- 
poration from unjust and oppressive conduct toward the in- 
dividuals with which it comes in contact. But all history 
and experience tell us that liberty, justice and fair dealing^ 
hang on a slender thread, and are in peril whenever power is 
restrained only by what its possessor may deem expedient 
and best for himself. 

Second. Legislative control. This is most effectively 
secured by measures which necessitate the widest possible 
publicity of the corporation's affairs and the fewest opportu- 
nities for bribery of public agents and officers. It is gener- 
ally believed that our large corporations constantly use cor- 
rupt means to influence legislation. This belief is undoubt- 
edly based on humiliating facts. Numerous instances are 
constantly occurring in which the wealth of corporations is 
used to corrupt elections. We therefore need stringent laws 
to prevent money being directly or indirectly used to buy 
votes. The State should furnish tickets to voters so that the 
pretext of raising money for printing tickets would no longer 
exist. We are rapidly drifting into a condition in which it 
will be utterly impossible for any one to obtain nomination 
for important of^ce unless he be both able and willing to 
furnish a large sum for illegitimate use during the campaign. 
Candidates should be prevented from using a single dollar 
in any way whatsoever to promote their own election. 

ONE OF THE MALN ROOTS OE THE LABOR QUESTION. 

What a long period of suffering and privation has intervened 
between the present and the time when man first stood on earth 
with no tools but his naked hands. And hoiv much easier the 
lives of your ancestors might have bee7i if they Jiad possessed the 
implements we now have. 

To those who were actors in that drama, it seems but as 
yesterday since this country emerged from a civil war terribly 
destructive of life and property. The initial point of this 
awful struggle arose from discussion of a question which irre- 
sistibly thrust itself upon public attention : " Has one man 



OWNERSHIP OF LABOR. 



419 



a right to own another man ? " In other words : Has capi- 
tal a right to own labor ? 

One phase of this contest was settled by the war. One form 
of slavery was abolished. One method, which capital em- 
ployed to own labor, has been made impossible. But other 
means and devices employed by capitalists to own laborers 
are still under legal protection, and in the majority of in- 
stances are sanctioned and defended by the same persons 
who bitterly denounced the form of labor ownership extin- 
guished bythe logic of human butchery. Since the war, the 
majority of persons imagine that capital cannot own labor. 
But a little examination shows, that the emancipation 
measures only partially destroyed the control of the capital- 
ist over the laborer. 

For example, let us suppose an industrial arena of some 
kind ; no matter whether it be a factory, a forge, a mine, a 
plantation, or a ship-yard, wherein one thousand laborers 
are employed. Comparatively few, and those inexpensive, 
tools are required. Each workman furnishes his own tools 
and is paid a certain amount of wages per day. Under such 
conditions, the laborer is comparatively independent. If any 
disagreement arise between the employer and himself, he 
can pack up his tools in a few minutes and, with his tools 
on his back, seek employment elsewhere. 

OWNERSHIP OF WHATEVER PERFORMS LABOR IS OWNER- 
SHIP OF LABOR. 

Let US reverse the aforesaid conditions and see what the 
result will be. Suppose some inventor should create an 
automaton of steel, wood and leather which will perform 
exactly one man's labor in a day's time. The cost of this 
automaton to be $500. Under such a condition of facts, 
is it not clear that if the capitalist should buy one thousand 
of these bloodless laborers he would own his labor ? He 
could turn the men made of flesh and blood adrift. He 
could carry on his works by the labor of his own chattels 
just as truly as if those chattels consisted of one thousand 



^20 SOCIAL STRUGGLES. 

Africans, just landed from a slave ship, for which he had 
paid $500 a piece. 

Let us now perfectly retain the principle involved in the 
last aforesaid example and state another condition of affairs. 
Suppose the aforesaid capitalist, instead of buying a thou- 
sand automatons, should buy a steam-engine and some 
machinery, which would enable one hundred laborers to per- 
form as much labor in a day as a thousand laborers could 
with the old-fashioned tools owned by themselves. The 
machinery is so expensive that the laborers are too poor to 
buy it. Even if they combined, and saved money enough 
to start a rival industry, they could not make and use ma- 
chinery similar to that owned by the capitalist. He has his 
machinery protected by a law called " a patent," and as 
this law is backed by the entire judicial and military power 
of the nation, he has the exclusive right, for a long term 
of years, to use the machinery covered by that patent. It 
is utterly in vain for the nine hundred workmen to think of 
competition with machinery by using their own tools. 
Now, in this case, is it not just as clearly true that 
the capitalist owns the labor of nine hundred men, as it is 
in the aforesaid hypothetical case in which he owned the 
labor of a thousand bloodless workmen ? 

A FISH-HOOK MACHINE. 

In this city, at the present time, several automatic labor- 
ers are at work making fish-hooks. The wire is automatic- 
ally fed into one end of a machine, and, without the touch 
or guidance of a single human finger, it emerges from the 
other end of the machine a perfectly finished fish-hook. 
The hooks are made by one of these machines many times 
faster than they could be made by a machine of flesh and 
blood. A pail is hung on a spout at the end of the machine 
where the hooks emerge, and into this the completed hooks 
rapidly fall. Whoever will take the pains to examine the 
construction of a fish-hook cannot fail to see that the afore- 
said machine is a great stride toward the creation of autom- 
atons which will accurately and uncomplainingly perform 



\ 



WHEN LABOR IS OWNED. ^21 

the labor of living machines. It will also clearly appear to 
him, that the capitalist who owns one of these expensive 
machines, protected from competition by a patent, and by 
successive patents on improvements in that machine, virtu- 
ally owns several fish-hook makers. He owns the fish-hook 
makers, because he owns and has absolute control over the 
tools without which those fish-hook makers cannot earn five 
cents a day. 

Hundreds of illustratioiis similar to the fish-hook machine 
could be cited. But that is sufficient to exemplify the prin- 
ciple involved in all such cases, viz. : Whoever ozvns the 
tools, witJioiit ivJiicJi a ivorkinan cannot earn a living, oivns 
the labor of that workman, and, to thai extent, ozvns the ivork- 
man himself. Whenever this occurs, capital virtually owns 
labor. 

A MAN SHOULD CONTROL HIS MEANS OF SUBSISTENCE. 

In one sense, a laborer without tools has perfect free- 
dom. But, if deprivation of tools imply deprivation of the 
means of supplying himself with the necessaries of life, 
whoever controls his tools controls the workman's very ex- 
istence. Just to the extent the capitalist can control the la- 
borer's food, the capitalist has control of the laborer's lib- 
erty and person. It is possible that the workman's liberty 
may thus be restricted to that amount of which it has al- 
ways been impossible to deprive a slave ; — viz., the liberty 
of dying. 

What occurs in the aforesaid example, in case a disagree- 
ment arise between the owner of the nine hundred metal- 
lic workmen and the one hundred living workmen ? Sup- 
pose the one hundred, thinking they are not receiving a 
just proportion of the wealth created jointly by themselves 
and the nine hundred automatic workmen, should strike 
for higher wages? Their deniands are not acceded to and 
the entire thousand laborers are thrown out of employment. 
What then happens? It is certain that the owner of the 
nine hundred workmen, or what is essentially the same 
thing, the machines which perform a labor equivalent to 



.22 SOCIAL STRUGGLES. 

the labor of nine hundred men, is at comparatively little 
expense for the maintenance of his chattels. While they 
are idle, he loses the interest on their value and is at the 
expense of protecting them from rust and other injury. 
Derangement of his business also causes him, to a consider- 
able extent, loss of the value of his own services in manag- 
ing it. But the hundred living workmen are subjected to 
nearly the same daily expenses when idle as when at work. 
The idle machines, the automatic laborers do not eat. But 
the idle workmen must eat or die. 

In such an event, is it not apparent that the power of the 
one man who owns nine hundred laborers is far greater to 
coerce the hundred, than the power of the hundred is to co- 
erce the owner of the nine hundred workmen ? 

One of the chief characteristics of the last century is the 
enormous progress therein made in mechanical art and 
skill. The principles discovered by scientific men in the 
laboratory and study have been converted to practical use 
in the workshop by the inventor and artisan. The vast 
majority of the tools used by labor, wherewith to create 
wealth, one hundred years ago, have been made worthless 
by the invention of better ones, and the few in existence 
are found only as curiosities in museums and similar 
places. 

Every year a large addition is made to the great number 
of labor-saving machines already in use. In all probability, 
the future will witness as great an increase in the invention 
of machinery as has occurred in the past. Many minds are 
constantly at work devising plans for introducing machin- 
ery into departments of industry where manual labor still 
holds sway. It is likely these persons will, to a greater or 
less extent, succeed in their purpose. 

NEED OF A LARGE AMOUNT OF CAPITAL. 

When the whole field of invention and mechanical skill is 
surveyed at a glance, another startling fact appears, viz. : 
the steadily growing expensiveness of machinery. It is 
steadily growing more effective and performs more and 



OWNERSHIP OF TOOLS. 



423 



more of the work formerly done by human hands. This 
necessitates and impHes machines more ponderous, more 
complicated, more accurately constructed, and more costly 
than those of inferior power of execution and less adapta- 
tion to the pecuHar purpose required. Every year more 
and more capital is required to equip a mechanic with tools 
which will enable him to successfully compete with others 
engaged in producing the same forms of wealth that he is. 

The inevitable result of the foregoing facts is that the tools 
of labor are steadily passing into the ownership of capital- 
ists and beyond the control of the artisans, the successful 
prosecution of whose calling depends on the use of those 
tools. Some one must be the owner of these tools, and 
such ownership makes a capitalist. In an indirect, but 
nevertheless very effective manner, capital yearly owns more 
and more labor. It is constantly growing more difficult for 
a mechanic, beginning life with nothing but his bare hands, 
to obtain the independence which naturally flows from the 
combined ownership of tools and possession of the requisite 
skill to use them in creating some form of wealth. What 
chance has a poor mechanic, of average business ability, to 
ever become the owner of a tool so expensive that the an- 
nual interest on its cost is greater than his entire wages for a 
year? Such a person has not a fair chance in the ever pres- 
ent industrial struggle, compared with the inheritors of 
wealth, the born owners of the mechanics' tools in use at 
present. If he undertake to own his own tools, he has the 
terrible disadvantage of working in competition with men 
already the owners of many workmen with iron bones and 
steel fingers. What wonder is it that he should either 
despair or be filled with hatred of a social system under 
which such inequalities of position are possible ? 

This then is one of the problems which, whether we de- 
sire to or not, we must face and solve. Cowardly evasion 
will not avail. Wisdom and humanity unite in bidding 
us candidly recognize the facts, and, by interchange of 
thoughts, arrive at just conclusions. 



^24 SOCIAL STRUGGLES. 



INVENTIONS SHOULD NOT BE MADE MEANS OF OPPRES- 
SION. 

What remedies shall we employ to cure the aforesaid evil 
before it develops into a more alarming condition? 

Obviously, it is neither the destruction of labor-saving 
machines nor the repression of invention. Every automaton 
which performs human labor should be recognized as a means 
of relieving mankind from drudgery. If it do not, it is not 
the machine which is to blame. It is the conditions under 
which it is employed that are at fault. Every inventor who 
facilitates the creation of wealth should be crowned as a 
general in the field of industry whose victories over matter 
have been won by patient thought and labor. If his crea- 
tions, after being set at work, leave behind them a trail of 
oppression, distress, and bitterness, it is not his fault. They 
should bring additional wealth, comfort, and happiness to 
every member of the human family. When they fail to do 
so, the social system under which they are employed must 
be defective in some way. 

The annual production of wealth in this country is esti- 
mated at about twenty per cent, of the total wealth of the 
country. A considerable portion of this wealth is the pro- 
duct of automatons,— of various kinds of machinery. It fol- 
lows that, to the extent that a class controls such machinery 
and receives the profits therefrom, just to that extent such 
a class controls and absorbs the annual production of wealth. 
But this is not the fault either of the machines or of the in- 
ventors who devised them. The defect is in the manner in 
which the ownership of those machines and the profit aris- 
ing from their use are distributed. 

HOW INVENTIONS ARE MADE. 

All scientific discoveries and all devices whereby a 
discovery is practically applied to the improvement of the 
condition of mankind are not due solely to the labors of 
the immediate discoverer and inventor. They are the 
culmination of the thoughts and labors of generations. As 



INJUSTICE SOMEWHERE. 425 

such, in the widest sense, they are the heritage of the whole 
human family. What would be thought of a man who 
should propound the, idea that the discovery of anaesthetics 
should inure only to the benefit of those worth over ten 
thousand dollars ; and, that all worth less than that sum 
should bear severe surgical operations without relief from 
suffering? Would he not be denounced either as an idiot, 
or as a monster of cruelty. 

ALL SHOULD BE BENEFITED BY DISCOVERIES AND 

INVENTIONS. 

It is self-evident that progress in science and art ought 
not, in any respect whatsoever, place a child born in pov- 
erty in a position of greater disadvantage than it would have 
been if such progress had not been made. A. little reflec- 
tion makes it also evident that such a child should not 
simply have its condition ameliorated by such progress. 
The same relative advantage should accrue to it as accrues 
to the children of the rich. In many important respects, 
the child of a poor mechanic, born in 1885, has greater 
advantages in carrying on the struggle of life than were 
possessed by such a child born in 1685 or 1785. But this 
undoubted fact does not satisfy the desires of the laboring 
classes. It ought not to satisfy them, because simple 
justice requires that every forward step in human knowl- 
edge and progress should impartially benefit the whole 
people. Unless the poor child in 1885 has the same rela- 
tive advantages over the poor child born in 1785 that the 
rich child in 1885 has over the rich child born in 1785, there 
is an injustice somewhere ; there is a defect in the distribu- 
tion of the benefits of means whereby mankind can supply 
their necessities and march onward toward a higher plane of 
development. 

GROWTH OF INEQUALITY. 

While the condition of the laboring classes to-day is far 
better than it was in 1785, the inequality between different 
classes is greater now than then. There is a greater dis- 



426 SOCIAL STRUGGLES. 

parity of income, of wealth, and of social position. The root 
of this matter largely lies in the fact that the means of 
creating wealth, the tools without which labor is compara- 
tively helpless, have, to a large extent, silently passed into 
the ownership and control of the capitalists, and especially 
of those who own a large amount of capital. 

WHAT SHOULD BE DONE. 

When a person is in difficulty or danger by reason of 
a change in his condition the obvious remedy is to restore 
him to the circumstances he was in prior to his distress. 
Thus when a man is in danger of drowning, the first thing 
to do is to pull him out of the water. 

The artisans have been placed at a disadvantage by 
taking away the ownership of their tools. The obvious 
remedy is to restore these men, as far as practicable, to 
their former position of tool-owners. Measures must be 
adopted which will enable a mechanic to directly or indi- 
rectly become a joint owner of the expensive tools required 
in modern industry. This can be done either by enabling 
him to buy a share in ownership of the machines with which 
he works ; or by making his compensation consist, in part, 
of the profit derived from combining his personal labor with 
the automatic labor of the machine. Such methods, how- 
ever, are practicable only when the workmen have a consid- 
erable degree of character and intelligence. The province 
of this work is not to discuss the details of such measures. 
Its only object is to indicate the principles involved and to 
show the' justice of such procedures. When that point is 
conceded, the mode of their execution will soon be arranged. 
When we adopt a mode of recompensing inventors radi- 
cally different from that now in vogue, and abolish our 
present patent laws, we shall have taken a great step toward 
making the artisan, at least, a part owner of the tool with 
which he creates wealth. 

In opposition to such a plan, the first thing which will be 
urged is the well known fact that an attempt to aid a lazy, 
dissolute, intemperate mechanic to become the owner of 



I 



JUSTICE INJURES NO ONE. 427 

capital is as futile as to hold up a coarse sieve and try to fill 
it with fine sand. We concede that no one can be helped 
who will not try to help himself. But if the follies and 
misdeeds of a few artisans constitute good reason for depriv- 
ing all artisans of a fair and equitable opportunity to im- 
prove their condition, does it not inevitably follow that the 
follies and wrongful acts of a few capitalists form a valid 
reason for depriving all capitalists of their just rights ? Such 
an argument could be applied to many different facts and 
conditions and would always lead to a conclusion as pre- 
posterous as the one aforesaid. No sound argument can 
be framed in support of any policy or system which is not 
based on the self-evident fact that every man is equal to 
every other man, so far as his natural equitable rights are 
concerned ; and, furthermore, that the rights of one citizen 
should be as fully protected as those of another. 

The question may be asked : Would not the above sug- 
gested measures injure capitalists? No. In the proper 
sense of the word, no one is " injured " by taking away 
from him some unfair advantage which he is using to the 
detriment of others. The aforesaid suggested measures 
would doubtless powerfully tend to diminish the present 
disparity of wealth. They would tend to prevent some 
persons from growing as rich as they would if allowed to 
retain wrongful advantages and absorb the wealth created 
by, and justly belonging to others. They would also lessen 
the number of idle young men and women, the children of 
rich parents, who consume wealth to the creation of which 
they have never given an hour's labor. 

Such things are not necessarily " injuries." They may 
become the greatest blessings. A person who cannot grow 
rich without some unjust advantage being first given him 
ought to live without riches. Riches properly belong only 
to those who, on a footing of equality, exert superior ef- 
forts and ability in creating and saving wealth without prej- 
udice to any person whatsoever. 



CHAPTER XIX. 

Socialism. — Horror of Socialism. — What Socialism is. — A Socialistic 
Post-office. — Socialistic Schools. — Socialistic Libraries and Parks. — 
Socialistic Water and Fire-engines. — Socialistic Money. — Socialism 
at West Point. — Socialistic Enterprises.— Advantages of Socialism. 
— Should Socialism be Extended ? — Socialism does not Favor Lazi- 
ness and Unthrift. — How to Help the Poor. — Ungrateful Snobs. — 
Future Probabilities. — Causes of Discontent. — Why Some are 
Richer than Others. — What shall We do? — Lessons of Expe- 
rience. — " With what Measure ye Mete, it shall be Measured tO' 
you again." — Need of Hastening Slowly. — Need of Changing our 
Patent Laws. — Defects in our Social System. — Folly of Violence. — 
The true Course. 

// is never safe to allow one class to enact laws in regard ta 
their own interests. 

Napoleon is reported to have said: "The world is gov- 
erned by epithets." Certain it is, that in all periods of his- 
tory, words have been used as the equivalent, or synonym, 
of elaborate and presumably conclusive arguments, Thus^ 
for a considerable time in the history of this country, the 
term "Abolitionism" was employed to define particular 
ideas, so revolting to the majority that a mention of their 
name rendered useless any further statement or examina- 
tion in regard to them. For a long period, the term 
" Christian " applied to a person was all that was necessary 
to brand him as an enemy of the human race, to whose 
words none but a knave or a fool should listen. A thou- 
sand years were not sufficient to destroy the argument once 
conveyed by the word "Jew." Once having established 
the fact that a person was a Jew, no further consideration 
of his merits was deemed necessary. That name barred all 
argument and overpowered all facts. For many centuries, 
the term " heretic " was all the description needed of a 
person to show that his ideas and character were so utterly 
bad that society should treat him as an outlaw and regard 

428 



GROUNDLESS FEARS. 



429 



it a crime to listen to his speech or read his writings. Mul- 
titudes have been put to death for reading the works of 
authors to whom the epithet " heretic " had been applied. 
Hundreds of cases similar to the foregoing could be cited, 
all showing that a word, an epithet, has swayed the policy 
of nations, time and again. 

Slowly and painfully, the world has outgrown a fear of 
many terms which once sent a thrill of horror through what 
was then the most respectable and intelligent portion of 
society. But human nature is unchanged. The difference 
between generations and ages is simply in the kind of 
words and epithets used, instead of arguments, to prove 
that certain ideas or modes of conduct are reprehensible. 
At first, epithets overpower all argument , but finally they 
lose their spell, — the real argument is listened to, and then 
the senseless nature of the epithets appears. But a new oc- 
casion at once arises; a new epithet is coined, which goes 
through the same stages as its predecessors. 

HORROR OF SOCIALISM. 

Recently, the term " Socialism " has been used to sum 
up and define certain ideas and principles so utterly absurd 
and wrong, in the estimation of the majority, that an ex- 
amination of them is thought useless. It is presumed that 
nothing is requisite to condemn any proposition, but to es- 
tablish the fact that it is " Socialistic." 

Very learned essays and books have been written to 
show that socialism is utterly impracticable and visionary. 
But these wise men ignore the simple fact that, to a consid- 
erable extent, socialism is in actual and successful operation 
in this country, and is so intrenched in the good opinion of 
the masses of our population that nothing can dislodge 
it. The " impracticable notion " has arrived and has evi- 
dently come to stay. 

WHAT SOCIALISM IS. 

The essence of socialism is the ownership, management, 
and use of property, by numbers of persons in common, 



^2o SOCIAL STRUGGLES. 

enforced by law. Socialistic property is bought with means 
contributed in common ; it is managed by agents whose 
wages are paid in common ; and its use and objects are for 
the common welfare without reference to the amount con- 
tributed for its purchase and support by each individual. 
Those who contribute a large amount toward the purchase 
or support of socialistic property have no greater share in 
the benefits of its ownership than those who contribute 
very little, or nothing. It is state, colonial, or municipal 
ownership and control of property and business. 

A SOCIALISTIC POST-OFFICE. 

Our postal system is pure socialism. A vast amount of 
real estate has been bought with taxes paid in common. 
Buildings, many of them very costly, have been constructed 
with money paid in common. The carriers of the mails are 
paid from the common purse, and the same is true of all 
the agents employed to receive and deliver the mails. 

To partially support this enterprise, a tax is laid on the 
people in accordance with the principles on which the pos- 
tal property is bought and managed in other respects. The 
man who mails a thousand letters at once does not get them 
carried at wholesale price. Unlike ordinary commercial 
transactions, there is no such thing as charging a person 
more because he buys at retail. The price for one letter is 
one-thousandth part the price for carrying one thousand 
letters. 

Whether a letter is carried two miles or two thousand 
miles makes no difference in the tax laid upon the sender. 
Neither does it make any difference whether the place to 
which a letter is to be carried is easily and cheaply reached 
by steamboat or railroad ; or whether it can only be 
reached by a long and expensive journey by stage or horse- 
back. 

In conducting the postal system, an army of agents and 
many millions of capital are employed. In fact, the recep- 
tion, carriage, and delivery of the mails for fifty millions of 
people is a business of enormous magnitude. Considering 



I 



SUCCESS OF COMMON SCHOOLS. 



431 



the immense territory over which this business extends ; 
the difficulties of its accurate transaction ; the great num- 
ber of requisite employees ; and the large amounts of 
money transmitted, the postal system can challenge a 
comparison of its management with that of any private 
enterprise. 

It is not simply in this country that this socialistic enter- 
prise is in successful operation. The civilized globe is now 
encircled with a chain of post-offices. And the experience 
of the whole world has recorded so much in favor of a post- 
office owned by the whole people, managed by the peo- 
ple's servants, aiid supported by taxes laid on a socialistic 
principle, that there is not the slightest probability of its 
ever being abandoned. Instead of that, the tendency is 
steadily toward widening the duties of the post-office. In 
England, postal savings-banks have been in successful oper- 
ation for a considerable time. In this country, the cost of 
sending matter has been so much reduced that, for many 
purposes, the mails are now used instead of express compa- 
nies. And it is quite probable that the functions of our 
postal department could be further increased with advan- 
tage by reducing the cost of sending packages under five 
pounds in weight, and by the establishment of a system of 
postal savings-banks. 

SOCIALISTIC SCHOOLS. 

Our common-school system is another example of pure 
socialism. School buildings, books and apparatus, to the 
extent of many millions of dollars, are owned in common. 
The wages of the teachers, the fuel, and all otherattendant 
expenses of these schools are defrayed by laying a socialis- 
tic tax. The number of children a tax-payer sends to 
school makes no difference whatever with the amount of 
tax levied on him to support the common school. 

Some persons have justly found fault that comparatively 
useless studies, such as Latin and Greek, are taught in our 
public schools. But, most such persons have advanced 
that such teaching was "socialistic." This is no reason at 



A^2 SOCIAL STRUGGLES. 

all. If valid, the entire common-school system would be 
abolished as well as the study of Latin and Greek, Such 
studies are merely an abuse of our thoroughly socialistic 
common schools. Substantially, their defects are similar to 
those of the majority of private schools. They attempt to 
teach too many things ; neglect instruction in the cardinal 
doctrines of honor and morality and burden the pupils' 
memory, instead of making plain the few simple principles 
upon which rest self-direction and independent thought. 

SOCIALISTIC LIBRARIES AND PARKS 

Public libraries are an example of socialism. The build- 
ings and books are paid for and owned in common. A 
man worth only ten dollars has the same right in a free 
public library as a man has who is Vv^orth ten million dollars. 
Whether a person use the library himself or not makes no 
difference in the tax assessed upon him for its support. 

Public parks are also forms of socialism. Such parks are 
owned, supported, managed and enjoyed by the public in 
common. He who never visits one of these parks' is not 
thereby exempt from taxation for their support. The ex- 
perience of cities which have established public libraries 
and parks is in favor of their continuance and extension. 

SOCIALISTIC WATER AND FIRE-ENGINES. 

The introduction of water in a city, by a city, is a purely 
socialistic enterprise. In such case, the expense of water 
for private use is defrayed by a tax laid in proportion to 
the water consumed. But the great expense of water for 
extinguishing fires and for other public purposes is de- 
frayed by taxes laid on the community in common. The 
experience of cities is in favor of this form of socialism. 
As examples on an immense scale, we may look at New 
York, Boston, Chicago, Philadelphia and other large cities 
that have expended millions from the common purse to 
supply water in common. What would induce New 
York, for instance, to put the Croton water into the hands 
of a private company ? 



ISSUING OF MONEY. 433 

All the large cities have supplemented socialistic water 
with an expensive fire department. The tax-payer whose 
property does not need fire-engines for its protection pays 
the same tax as if it did. The engine-houses, the engines 
and all the other means for putting out fires are owned in 
common, and the wages of the firemen are paid from the 
common purse. Thus the interests of the fire department 
are made completely identical with the interests of the 
people. 

SOCIALISTIC MONEY. 

The mints are another illustration of pure Socialism. 
The mints and their machinery are owned in common and 
the expenses of their maintenance are defrayed by a common 
tax. Although a considerable sum of public money is 
yearly appropriated for the support of the mints there is no 
probability that any civilized nation on the globe will re- 
turn to the old system of private coinage. Coinage by the 
State, for the benefit of the State, has been found better 
than to have coinage in the hands of those whose self-inter- 
est continually tempt them to act contrary to the common 
interest. 

The greenbacks are socialistic. They are printed at the 
common expense and for the common benefit. The only 
kind of money now in circulation in the United States that 
is not socialistic is the national bank-notes and they are 
partially so. These notes are printed at the common ex- 
pense, but they are made for the benefit of the national 
bankers, who loan them at interest to the people. In all 
probability, these notes will soon be replaced by national 
paper money, and then our entire currency will be composed 
of money made and used by the people, for the benefit of 
the people. No special class of persons will then have spe- 
cial rights to issue money for their own special benefit. 

SOCIALISM AT WEST POINT. 

West Point is a purely socialistic institution. Young 
men are fed, clothed, lodged and educated at the public 

28 



434 



SOCIAL STRUGGLES. 



expense. Furthermore, as soon as their studies are com- 
pleted, they are furnished permanent employment in the 
public service and paid out of the common money. When 
incapacitated in the public service, by any cause, from 
performing further duty they are paid a pension for the re- 
mainder of their lives. Thus, a graduate of West Point, 
who faithfully performs his duty, is an adopted child of the 
nation, certain of a maintenance through life. What re- 
cord have the offspring of this socialistic mother made? 
There is but one voice on that subject. On the average, no 
class of public servants have rendered greater services to 
the nation ; and none have shown greater fidelity and hon- 
esty when placed in positions where public interests and 
public money were in their keeping. If such good results 
flow from a socialistic school devoted to giving special in- 
struction in the arts of war, why may not similar benefits 
flow from a kindred school devoted to giving special in- 
struction in the arts of peace ? 

If a high sense of honor can be instilled into the pupils of 
one public school, why cannot other public schools be made 
teachers of personal honor ? 

SOCIALISTIC ENTERPRISES. 

The attention of the whole civilized world has recently 
been directed to that wonderful achievement of science, the 
tremendous explosion which shattered acres of rock in Hell 
Gate Channel. But many persons do not reflect that it was 
a socialistic enterprise. It was directed by pupils of West 
Point ; paid for out of the common purse ; and performed 
for the common benefit, without the slightest reference to 
any other consideration. 

Whoever visits New York or Brooklyn may see, hanging 
high in the air, a bridge connecting those cities which is 
one of the most daring and marvelous triumphs of engineer- 
ing skill this world has ever seen. And yet this wonder- 
ful structure is the product of what self-styled "scientists" 
have told us was " utterly impracticable," municipal social- 
ism. The Brooklyn Bridge has been built with common 



HO IV SOCIALISM BENEFITS. 



435 



money for the common benefit. Its benefits are compara- 
tively untried. But enough is known to render it certain 
that, if by magic the bridge could be obliterated and its cost 
refunded to the people of the great cities whose common 
money built it, an overwhelming majority would refuse 
such a proposition. 

Those past middle life can remember when nearly all the 
important bridges in this country were private property, for 
the use of which toll was charged. At the same time, our 
principal roads were managed by private companies who ' 
levied toll on travelers. Roads and bridges are now nearly 
all owned and kept in repair by the public and are free to 
the use of all. A community which has once abolished the 
inconvenience of toll-gates is not likely to permit their re- 
establishment. 

ADVANTAGES OF SOCIALISM. 

Many other examples of the actual and triumphant oper- 
ation of socialism could readily be cited. The advantages 
of a successful public co-operation are enormous. They 
arise largely from the fact that when the whole people con- 
duct a business the persons in charge of that business are 
public servants whose interests lie chiefly in serving the 
people to the best of their ability. For example, the people 
of the city of New York own the Croton water and hire 
those in charge of it. Therefore, these agents have few in- 
terests adverse to the interests of the people of New York. 

But if a private company owned the Croton, the domi- 
nant question before its agents would be : How large prof- 
its can we make from the sale of this water? The larger 
the profits made under their management, the greater the 
probability of their continuance in ofifice, at, perhaps, in- 
creased pay. The quality of the water and its abundant 
supply would be subordinated to a question which would 
arise whenever any improvement in the mode of obtaining 
or supplying the water was suggested; viz.. Will it pay? 
And by this question would not be meant : Vv^ill it pay the 



436 



SOCIAL STRUGGLES. 



people of New York? It would mean: Will it increase 
the profits of this water company ? 

What is true of a water company is true of a public 
mint, or any other form of established and successful public 
co-operation. Such a mode of conducting a business puts 
it out of the power of a few persons to conduct that partic- 
ular business, solely to make it just as profitable to them- 
selves, and just as great a burden on the rest of society as 
can safely be done. 

Wealth may be, and often is, obtained by legal means 
which are superficially just but essentially unjust. Such 
means of getting wealth are more dangerous to the com- 
munity than robbery by open violence, simply because they 
are so insidious as not to be immediately recognized and re- 
sisted. Those who have both the ability and the disposition 
to grow rich by stealthily preying upon the fruits of others' 
labor, are largely prevented from doing so, in whatever di- 
rection the general public assume control of a particular 
business. In other words, opportunities for getting more 
out of the public than is fairly given in return are limited 
by the extent to which business is carried on by the public 
themselves. For example, if the mails were not carried 
and distributed by the public, what a field for extortion and 
plunder that business would be ! This might be done so as 
to appear at first sight equitable, and the superficial ques- 
tion continually asked in regard to that, as it now is with 
reference to existing extortion : " If the price be too high, 
why do you buy it ? " 

The public may, and sometimes do, suffer losses from dis- 
honest ofificials. But such losses are usually trifling com- 
pared with the enormous robberies inflicted on society by 
the greed and rapacity of private owners who control some- 
thing the public are obliged to buy of them. For instance, 
the public loses comparatively nothing by dishonest mint 
ofificials, although many millions of gold and silver yearly 
pass through their hands. On the side of private owner- 
ship, look at the vast sums continually stolen from the 
public by dishonest manipulation of railroads, telegraphs, 



IS OUR KNOWLEDGE PERFECT? 



437 



stocks, money and other forms of wealth under private con- 
trol ! Look at the colossal fortunes drawn from the people 
by placing extortionate prices on patented articles ! And 
look at the great and sudden wealth obtained by artificially 
raising and lowering the prices of grain and other prod- 
ucts! 

SHOULD SOCIALISM BE EXTENDED? 

The aforesaid facts, and kindred ones which could be 
readily cited, lead us to ask : Have we reached the limits 
to which socialism can be employed with benefit to society? 
That there is a point at which public co-operation must 
give way to individual and private liberty and freedom of 
action is undoubtedly true. The question is, what, and 
where that point is ? How much further can the affairs of 
mankind be advantageously conducted by a system of co- 
operation so extended that every citizen is made one of the 
partners ? 

Those small persons who fancy themselves on the highest 
attainable peak of wisdom make an outcry at the least sug- 
gestion of a greater extension of municipal and national co- 
operation. But as such wails; and the doleful prophecies 
which always accompany them, have always occurred at 
every step of human advancement, little attention should 
be paid them. 

However, because many things can advantageously be 
done in common, it by no means necessarily follows that 
therefore all business should be so conducted. It is clear 
that nothing should be done the tendency of which would 
be to encourage laziness and wastefulness, neither should 
anything be done that would weaken incentives to acquire 
an individual home and support an individual family. 

SOCIALISM DOES NOT FAVOR LAZINESS AND UNTHRIFT. 

It is commonly supposed that all forms of socialism foster 
the vices of idleness and improvidence. But the present 
generation, living under the influence of a large number of 
socialistic institutions, are more industrious and provident 



438 



SOCIAL STRUGGLES. 



than their forefathers were who hved before public owner- 
ship and management of property were dreamed of to the 
extent now in actual existence and operation. There is no 
evidence that the postal department, public schools, public 
libraries, and public parks make those who enjoy their 
advantages either lazy or shiftless. On the contrary, those 
institutions, and kindred ones, are potent generators of 
industry and thrift. Their demonstrated tendency is to 
elevate the self-respect of the masses ; to widen the horizon 
of their thoughts and ideas ; to give them a fuller and more 
comprehensive knowledge of the advantages derived from 
ownership of capital ; and, above all, to inspire them with 
hope that there is a possibility of their condition growing 
steadily better, if they will only make a little more effort to 
help themselves. 

HOW TO HELP THE POOR. 

The history of all attempts to improve the condition of a 
degraded class tells one story with painful monotony. No 
idleness and improvidence are so difficult to remedy as that 
of persons in poverty and misery, hopeless of ever being 
able to reach a condition of greater comfort and independ- 
ence. Despair is the most dangerous of all social diseases. 
Whatever makes it a little easier for such persons to escape 
from the bondage of abject poverty and humiliating social 
inequality, and whatever throws light upon a path leading 
from the morass in which they are mired to higher and 
pleasanter grounds, has a powerful tendency to make them 
more industrious and frugal. Little can be done to amelio- 
rate the condition of a community, or an individual, by 
direct alms. But means which show the easy possibilities 
of self-help are permanently fruitful of good results. 

UNGRATEFUL SNOBS. 

We frequently witness events which make us ashamed 
of our kind. We see persons who in childhood occupied 
a position verging on pauperism. By the kindly help of 
socialistic institutions they have emerged from want and a 



FURTHER STEPS TO BE TAKEN. 



439 



precarious existence to a state of comparative affluence and 
wealth. They now snarl at the hand that lifted them out of 
the mud, and clothed and fed them. They denounce the 
Sermon on the Mount as an ancient humbug and proclaim 
the gospel that every man should solely take care of him- 
self. This shallow selfishness is styled " Economic Science." 

FUTURE PROBABILITIES. 

Our ancestors, five hundred years ago, imagined their 
social organization perfect. We are prone to imitate them 
and to fancy further progress impossible. But history 
forces us to concede that the tendency of our race, the 
world over, for the past century, has steadily been toward 
the principle of socialism. Where we shall ultimately land 
no one can tell. The certain thing is, that many kinds of 
business are now conducted with great advantage by the 
whole people which, one hundred, and, in many cases, fifty 
years ago, it was supposed could only be fitly carried on by 
private enterprise. Reasoning from the past, it seems prob- 
able that the results of human selfishness can be mitigated, 
and a remedy found for many social evils, by placing still 
more kinds of business under public ownership and control. 

CAUSES OF DISCONTENT. 

It is commonly imagined, that multitudes are discon- 
tented simply and solely because some men have more 
wealth than others. But in fact such is not generally the 
case. Very few persons are so utterly foolish and unreason- 
able as to deny that a man is entitled to the fruit of his own 
labors. By reason either of inherited ability, better oppor- 
tunities, or superior diligence in self-improvement, one man 
may possess more than average skillfulness in carrying on 
some particular industry. If he diligently employ his attain- 
ments and strength in thus creating wealth, it is perfectly 
clear that the amount of wealth so created belongs to him 
just as rightfully as it would if, by reason of less skill and 
less industry, said amount were smaller. It is also evident, 
that if one man, by practicing superior economy, save 



440 



SOCIAL STRUGGLES. 



and accumulate more of the product of his labor than 
another, he is the owner of the amount so saved, just as 
rightfully as if, by less carefulness, or less self-denial, its 
amount were smaller. The portion of the community 
which will deny the foregoing propositions is insignificant 
in numbers and influence, and always must be. 

The Creator gave us equality of rights but did not give 
us equality either of physical or mental strength. As man's 
powers, to a considerable extent, are devoted to the creation 
of wealth it necessarily follows that inequality of power to 
create wealth, must naturally result in an inequality in the 
amount of wealth created by different individuals. Further- 
more, as men's judgments' of the relative importance of 
things differ ; and as some men are willing to undergo more 
self-denial for the purpose of saving wealth than others ; it 
necessarily follows that, by virtue of superior self-denial and 
economy, some men will naturally have, and justly possess, 
more wealth than others. But, after conceding the fore- 
going self-evident truths, the root of the matter we are con- 
sidering remains untouched : viz.. Except to a very limited 
extent, the great and increasing inequality of wealth, is not 
due to the superior skill, industry and economy in creating and 
saving wealthy of one man over another. 

WHY SOME ARE RICHER THAN OTHERS. 

Great inequality of wealth chiefly arises from the ability 
of one man being so dextrously and cunningly employed in 
manipulating and managing commercial and legal machinery 
as to result in his absorbing a considerable portion of the 
wealth created by a large number of other men. A small 
portion of wealth thus taken from each one of a large num- 
ber of persons amounts to a great sum when collected in 
one man's hands. 

Great wealth is usually not acquired by great skill and 
labor in its creation, because life is too short and man's pow- 
ers are too limited to render such a thing ordinarily possi- 
ble. Skill in obtaining legal possession of wealth created 
by the labor of others is the secret of most large fortunes. 



THE EVIL TO BE ABATED. 



441 



There are exceptions to the foregoing rule, but they are 
rare. Whoever doubts it is invited to trace the history of 
the large estates within his knowledge. Donations to hos 
pitals, schools and kindred objects are frequently merely at- 
tempts to divert public attention from the fact that consid- 
erable property has been gathered in one mass by indefen- 
sible methods. Vanity thus incites the donor to give prop- 
erty, which justly belongs to others, in a public manner. 

The evil we are called on to diminish is one man so using 
his abilities, his position, and his capital, as not to violate 
law and to appear fair : but, nevertheless to take advantage 
of others and thus acquire more wealth than in equity be- 
longs to him.* 

* As an indication ol growth toward a public recognition of hitherto 
largely unsuspected evils, the following letter, written by a distinguished 
clergyman to the New York Stin, January 4, 1886, is republished : 

To THE Editor of The Sun — Sir : You quoted lately a passage 
from an article of mine on overwealth, and invited me to explain my 
views. They are simply these 1 

1. Dangers to the peace and prosperity of the country must be guarded 
against by the Government and laws. 

2. Men and corporations, so large pecuniarily as to be able to buy up 
Legislatures, are a danger to the peace and prosperity of the country. 

3. The acquisition and holding of such wealth should be carefully 
hedged about by wise legislation. 

There is my syllogism. Now let me add a few notes : 
Ik A large part of the enormous wealth of individuals and corporations 
is made by lying, stealing, and oppression. The running up and down 
of stocks, what is known as " bulling and bearing," is practical lying, 
and has nothing to do with real values. Stock watering is nothing but 
stealing. Credit MobiHer schemes, by which directors rob stockholders 
to enrich themselves, are common methods of oppressing the poor, who 
have been fooled into putting their little all into stock. 

2. The rich man is protected by law, and what with preferred creditors 
and property held in his wife's name and a hundred other devices, he fails 
and is as rich as ever. The poor man is thrown out of employment, and 
has nothing to fall back on. He can be turned out at a moment's notice, 
and has no redress. 

3. We need legislation that will defend the poor, g. g., making a month's 
notice necessary before discharging a hand, paying him by the year as a 
salaried man, and giving him a proportional interest in the concern. 



^2 SOCIAL STRUGGLES. 



WHAT SHALL WE DO? 

If we would, we cannot evade the questions which this 
perverted use of the mechanism of our social organization 
forces upon us. When every man has a vote, unless the 
great majority are satisfied, they will certainly make changes 
of some kind in the national policy. With the present grow- 
ing discontent, it is not simply a question of standing still 
or not. The problem is narrowed down to this : In what 
direction shall we move ? Shall we make our social system 
still more democratic by adopting measures whose tendency 
will be to create a more equal distribution of wealth ? Or 
shall we make our social system more aristocratic and more 
plutocratic by adopting measures whose tendency will be 

4. We need legislation that will make the man, as he grows richer, to 
bear more of the public burdens. The graduated income tax would be 
the most equitable. If that be impracticable, as many hold, then let the 
nearest practicable plan be adopted, so that with us, as in ancient Athens, 
the rich shall bear the chief burdens of the State. 

5. We need legislation to restrict the power of corporations, forbidding 
and preventing gifts, direct or indirect, all watering, all use of franchises 
without full payment of value to the State, all interest of directors in side 
schemes of a parasitic nature, all secrecy of operation, all combination 
with other corporations, and all exorbitant dividends at the cost of the 
public. 

6. With such legislation there need be no hmitation of property. Jus- 
tice, equal to all, will give trade and acquisition a natural health, which is 
now denied by a partial legislation in favor of the rich and of great cor- 
porations. With such legislation property will be naturally limited, and 
there will be no place for discontent or socialism. 

7. If we saw a man a mile high stalking over this way from the West, 
and discovered that he had already trampled eight or ten towns into 
nothingness, we should feel called upon to take measures to suppress him 
before he could put his big foot on the Sun Building and blot outfits 
light forever. He would be a danger which we should be justified in pre- 
paring against. Our great corporations are very much like this giant. 
They crush thousands where they tread. They hire journals, courts, and 
Legislatures, and have everything their own way. It is for the people of 
our land so to curb this power that it may be only useful and not harm- 
ful. If this be socialism, I am a Socialist. 

Howard Crosby. 



WHAT HISTORY TELLS US. 443 

to widen the distinction between classes, to increase the 
number living in luxurious idleness, and to place the wealth 
and power of the country in fewer and fewer hands? 

By gross deception the people, in recent years, have been 
misled into sanctioning measures whose tendency is pluto- 
cratic. This has been effected partially by raising the cry : 
" Socialism ! Socialism ! " and pretending that socialism was 
the essence of evil. But all experience tells us not to be 
alarmed by cries raised by those who think progress consists 
in sitting still ; and by others fearful that their unjust priv- 
ileges will be taken from them. Suggestions for further 
practical application of the principle of public co-operation 
are legitimate, and worthy of the most earnest and careful 
consideration. Should such an inquiry reveal that a profita- 
ble extension of socialism could be made, if honest public 
agents were more easily obtained, let us improve our com- 
mon schools by teaching therein a keener sense of personal 
honor. 

Theorists have advanced doctrines adverse to such benefi- 
cent common works as the improvement of Hell Gate, pub- 
lic schools, public money, and kindred things. But these 
persons are insignificant in numbers and everything else 
except in the assurance with which they make pretense of 
superior wisdom. 

LESSONS OF EXPERIENCE. 

In England, where government by the few has had the 
fullest and fairest trial, such government is pronounced 
against by a steadily increasing minority composed of the 
foremost thinkers of that nation. The bulwark for centu- 
ries of aristocratic ideas bids fair, by the magic of discussion 
and thought, to soon be converted into a democracy. Those 
who admire the medieval barbarism which now lingers in 
England will then be forced to transfer their affections to 
Russia, or some other despotism. 

Not only England, but the whole world is demonstrating 
the failure of all forms of government, animated by the prin- 
ciple that a few — the privileged, the rich, the cunning, and 



444 SOCIAL STRUGGLES. 

the strong — should rightfully be permitted to prey upon the 
many, the simple, the poor, and the weak. 

"WITH WHAT MEASURE YE METE, IT SHALL BE MEAS- 
URED TO YOU AGAIN." 

Despotisms are trying to build dams wherewith to stay, 
among the masses, the slowly but steadily rising tide of 
broader thought and wiser appreciation of their own rights. 
But the higher the dams are raised the higher the water 
will surely rise behind them. When the inevitable break 
comes, these builders will be lucky if the shattered ruins 
be not stained with blood. There is only one question 
concerning retribution being visited on privileged classes 
which oppress a nation, viz.: How long will it be delayed ? 

Let us then go forward without fear toward a fuller, a 
more humane, and therefore a wiser democracy. The path 
which leads to equal justice to all and to national adoption 
of the principle that the strong should help, instead of tak- 
ing advantage of the weak, is the only path of safety. All 
others are lined with pitfalls. Let us be bold in search of 
Truth. Let us trust the conclusions to which it leads, 
and, at the same time, be cautious in devising and adopting 
measures to put them in practical operation and effect. 

NEED OF HASTENING SLOWLY. 

"In a multitude of counsellors there is safety." There 
is little danger that any pernicious measure will be adopted 
which is first fully subjected to public criticism. But 
where principles are framed into law, without such public- 
ity, serious mistakes are likely to be committed. 

No important law should be enacted by the legislature 
or congress to which it is first submitted. All such laws 
should be first carefully sifted. Those deemed worthy of 
possible enactment should be published as " Proposed 
Laws," and their final passage deferred to the next legisla- 
ture, enlightened by at least one year's public consideration 
of them. 

Two important results would flow from a procedure like 



ONE, OF MANY STEPS. 445 

that aforesaid. First. A much needed check would be 
placed on hasty and ill considered legislation. Progress 
would be more rapid because less time would be lost in 
retracing false steps. Second. The practical application 
and workings of democracy and socialism would be ex- 
tended. The whole people would have a greater voice 
than they now have in the enactment of laws and in shap- 
ing and directing the course and policy of our social organ- 
ization. More fully than at present every man would be a 
legislator. 

NEED OF CHANGING OUR PATENT LAWS. 

Of several ways which could readily be named whereby 
the principle of socialism could advantageously be given 
a wider practical application, let us briefly examine one, 
viz.: the public ownership of all inventions. 

Suppose a physician or a surgeon should make a dis- 
covery of great importance to mankind and claim the right 
to sell said discovery to a capitalist, who, for 17 years, 
would deprive the people of its benefits unless extortionate 
prices were paid for them. Such a medical man would be 
justly denounced as a traitor to the profession whose mis- 
sion is to allay human misery. Yet this is similar to what 
is done by inventors who sell important patents. 

In the aggregate, the public pay an enormous tax in 
form of high prices on patented articles. In the vast ma- 
jority of instances this tax is not paid to the inventors of 
those articles or of the machines which create them, but to 
the capitalists who directly or indirectly control the patents. 
Inventors generally lack the requisite capital to manufacture 
and distribute what is covered by their patents ; hence 
necessity compels a bargain with some one who has. In 
a majority of cases the proverb is then exemplified, that 
" necessity never makes a good bargain." 

As competition with a manufacturer whose wares are pro- 
tected by the patent law is out of the question, the whole 
community are constantly paying a large, and often a 
wrongful, tribute to those who control patents. Capital 



446 



SOCIAL STRUGGLES. 



thus quietly obtains and seizes an opportunity to levy an 
unfair tax on labor. When one patent expires, an improve- 
ment on the old one, or some entirely new patent, is secured ; 
thereby enabling capital to silently maintain an unnoticed 
and powerful advantage.* 

What will future ages think of a matter of then almost 
forgotten history, a system of law whereby the public bene- 
fit of inventions is postponed for half a generation after 
their practical application to some useful purpose? 

Every useful invention tends to remove the human race 
one step further from their primitive poverty and its ac- 
companying privation and toil. It is therefore sound public 
policy to foster invention. But we must remember that 
each individual inventor adds only one stone to the monu- 
ment of human knowledge which countless numbers of his 
predecessors have reared. Without the knowledge which 
has thus become common property, his invention would not 
have been possible. Therefore, the owners of this common 

* The following news item, from the St. Louis Republican, illustrates 
how our present patent law postpones the full benefit of inventions. 
Many similar facts could be adduced. 

NO CHEAP TELEPHONES BEFORE THE YEAR I90O. 

It will be a long time before telephoning becomes cheap. Bell's first 
patent, the one upon which all the others are founded, is dated March 7, 
1876. Patents are seventeen years in duration, and this first patent will 
thus run out in 1893, But there are other patents of more recent date 
upon parts essential to the operation of the instruments. For instance, 
the Blake transmitter was not patented until 1881, and it is so broad that 
it may be said to cover almost any transmitter which might be con- 
structed. This will practically secure the monopoly until 1898. Then 
there have been many other patents of date up to a very recent time, 
which, while not absolutely essential to telephoning, would defeat com- 
petition even if every patent on essential parts were out of the way. 
Thus the Bell Company controls patents upon switchboards and other 
apparatus used in making connections which would put competition by 
those who have not the right to use them at a great disadvantage. The 
nineteenth century will see no change from the present conditions, and it 
is impossible to foresee what other improvements will be patented which 
will in the future be considered necessities. 



PVJIA T SIMPLE JUSTICE DEMANDS. 447 

knowledge have a paramount right to every new invention. 
For his addition to the common stock of knowledge, the 
inventor should be treated as a citizen who has made a 
notable contribution to the commonwealth. He should be 
pensioned, or, in some other way, paid from the common 
purse, and paid very liberally. But neither he, nor his 
assigns, should be allowed, as at present, to make a step of 
human progress, for a considerable period of time, an instru- 
ment of human oppression*. 

Public ownership of inventions would not in the least 
check the development of scientific and mechanical knowl- 
edge and skill. On the contrary, it would stimulate them, 
by rendering their rewards more equitable and certain. 

But it would have a powerful tendency to check the 
growth of huge monopolies which virtually force the public 
to pay them extortionate profits on their goods, while the 
operatives whose labor created them are paid low wages. 
It would then be generally seen, that much of what is now 
ascribed to our tariff is really due to the evil influence of 
private ownership of inventions which should be free to 
every man who wishes thereby to render his labor easier, or 
more productive. 

DEFECTS IN OUR SOCIAL SYSTEM. 

What course should be pursued by those who believe the 
evils of monopoly and concentration of wealth in few hands 
could be diminished by enlarging the field of national co- 
operation ? 

Wherever wrong exists there is always one proper way 
to attack it, and that is the manner by which it can most 
effectually and speedily be destroyed. The choice of means 
depends entirely on circumstances. Revolutionary violence 
is not only admissible, but commendable, whenever despot- 
ism has shut off other means of redress. 

But in a nation where suffrage is universal and unobstruct- 
ed, no reasonable question can arise relative to the proper 
method of righting a public wrong. Where every man is 
armed with a ballot ; where the mails are open for the dis- 



448 



SOCIAL STRUGGLES. 



semination of ideas ; and where freedom of speech and as- 
sembly for discussion are unfettered, political agitation is by 
far the most potent means of abating any evils which may 
exist in the social organization. Where all power is lodged 
in the hands of the people they have no one but themselves 
to blame if the laws, or their administration, be not what 
they desire. 

FOLLY OF VIOLENCE. 

Lately, it has been said : " We wish changes in our na- 
tional policy but cannot get them, because the great ma- 
jority oppose us and could beat us in a political contest. 
Therefore, armed resistance is the only way to obtain our 
wishes." To such persons it may be said : If you are in 
such a small minority that a political contest is hopeless, 
would not a struggle with arms be equally hopeless ? 

Many who desire political changes overlook the readiness 
with which these changes can be obtained. Legislators and 
politicians are continually watching the drift of public sen- 
timent. Each party constantly tries to act in accordance 
with the wishes of the supposed majority of voters. Con- 
sequently, the policy of each party is based on the judg- 
ment of their political leaders as to what laws the people 
will ratify at the next election. As these leaders have sub- 
stantially equal sources of information, the result is the very 
nearly equal balancing of the two great political parties. 

The result of the aforesaid facts is that a resolute minor- 
ity of one voter in every hundred can often hold the bal- 
ance of power. And in the great majority of cases, a 
minority of one voter out of every twenty, who will un- 
flinchingly adhere to their principles, are absolutely certain 
of inducing one of the great parties to adopt their ideas. 

THE TRUE COURSE. 

The lesson of these facts is obvious. Whenever a few 
persons imagine themselves possessed of ideas which would 
benefit the public to incorporate into law, it is their duty to 
organize themselves into a political party for the express 



HOW TO WORK. 



449 



purpose of disseminating such ideas. If those sentiments 
will not bear the ordeal of public scrutiny and debate, 
they will deservedly soon become ridiculous and drop out 
of sight. But if they are founded in justice, means for 
putting them in practical operation wiE soon be devised, 
and their triumph will only be a question of time. 

Away, then, with all foolish talk about violence, blood- 
shed and arson being necessary to redress existing wrongs. 
Such criminal folly only aggravates present evils and post- 
pones their destruction. Let all socialists fully state their 
demands and the arguments therefor before that socialistic 
tribunal, gatherings of voters during political campaigns. 
The ballot is the most effective weapon which can be 
wielded against wrongful methods of government. There- 
fore, organizations and assemblages for the purpose of polit- 
ical education are essential, alike to the preservation of 
regulated liberty and to further social development. 

The way to split a log is to drive in the wedge with the 
small end foremost. The way to make social progress is 
to attack one evil at a time and to begin where a given 
amount of effort will produce the greatest results. At- 
tempts to effect twenty reforms at once are like trying to 
drive a wedge with the large end first. 

Of all the devices which man has invented to facilitate as- 
sociation with his fellows, none are so socialistic as a com- 
mon method of estimating value, a common mode of stat- 
ing prices and keeping accounts, and a common means of 
prescribing how what is due from one man to another shall 
be paid : to wit, the use of Money. The development 
of money is the mirror which reflects progress in social 
organization. The use of a given kind of money is sim- 
ply the consent of the community to unite for the pur- 
pose of accomplishing an object beneficial to each and 
every member of society, viz.: ease in making exchanges 
of labor and commodities, and precision in ascertaining, 
stating and recording the ratio in which one thing should 
equitably be given for another. Money, therefore, repre- 
sents the principle of common association for the common 



.CO SOCIAL STRUGGLES. 

good. Money is, in itself, the essence of socialism ; it is 
created at the common expense ; its existence and circula- 
tion rest on common consent, and all members of society 
use it as a common means of stating the terms and condi- 
tions on which they are willing to associate their labor, or 
capital, with the labor, or capital, of other units of the so- 
cial compact. The amount demanded for its use, the in- 
terest of money, necessarily determines to a large extent 
the amount of tribute which labor shall pay to capital. 

Therefore, the creation and regulation of money, in such 
manner that its use will promote a just association of man 
and man, should engage attention first and foremost in all 
attempts to elevate our social condition. In fact, so in- 
timately is money and its use entwined with all parts of 
the social fabric that an imperfect money, or a wrongful 
method of using money, may largely neutralize or destroy 
what otherwise would be beneficial and equitable associa- 
tions of labor and capital, both between individuals and be- 
tween large numbers of persons. 

Of all helps to improve man's social state, a good money,, 
properly used, is most potent. Of all means of social dis- 
organization, oppression and robbery, nothing is more in- 
sidious and baleful than a vicious currency, no matter how 
used, or an improper use of a good money. Consequently, 
socialists make a serious mistake when they waste their 
efforts on questionable matters of comparatively little im- 
portance and doubtful utility and allow the vital socialistic 
problems of a stable currency and an equitable rate of in- 
terest to lie before them unrecognized and unsolved. 

THE LIMIT OF RESTRICTIVE LAWS. 

Some persons claim that every man is entitled to abso- 
lute freedom, and that all the machinery and burden of 
government should be abolished. But it is evident that, 
until every person is both so wise and good that he needs 
neither advice nor direction from the world's experience as 
to what is best for himself and fellows, human conduct 
must be more or less under legal restraint. 



PRESERVATION OF LIBERTY. 



451 



If the right to unrestricted Hberty be a natural one, it is 
an inahenable right. Therefore, no matter what contract 
a man with full natural liberty may make, he has always 
the right at any time to disavow and cancel such contract. 
Otherwise his liberty is restricted. All socialists recognize 
the fact that unrestricted liberty, unrestricted trade and un- 
restricted competition are the essence of barbarism. They 
are simply conditions under which the strong are " free" 
to inflict wrong upon the weak. Very few men possess a 
mind at once so judicial and so honest that, without super- 
vision and restraint, they can safely be trusted with the 
property and rights of others. But, while seeking to so or- 
ganize society that equitable limitations will be placed upon 
the industrial and commercial association of mankind, it 
is easy to overstep the true bounds of interference and 
make unwise and unjust encroachments upon individual 
liberty. 



CHAPTER XX. 

Is it a Crime to own Land ? — Let us Think for Ourselves. — From whence 
does Land derive Value ? — Land has no Intrinsic Value. — Value of 
New York Land. — The Value of Land Depends upon Conditions. — 
The Value of a Certain Piece of Land is not Identical with that of the 
Work Performed Thereon. — Rights in Property. — Why Possession 
of a Certain Piece of Land is Desired. — Why Absolute Ownership 
of Personal Property is Desired. — Why Absolute Ownership of Real 
Estate is Desired. — If the present Owners of Land Retained Posses- 
sion as tenants, how State Ownership, without Compensation, would 
produce Injustice. — Private Ownership of Things. — Rise of Land in 
Value. — Some Facts Concerning Real Estate. — How Great Fortunes 
are Usually Made. — Has a Person a Right to Inherit Land ? — 
Aversion to Land Ownership. — How shall Choice of Lands be Made ? 

An Impracticable Scheme. — The True Principles of Taxation. — 

Folly of Invariable Taxes. — Land Titles. — Preservation of Liberty. 

No matter hoiv ividely extended nor deeply seated the ill 
effects of a vicious system of taxation, a currency zvhose use 
occasions great fluctuations in prices, inequitable grants of 
privileges, franchises and patents, and kindred governmental 
errors may be, they rarely attract the attention of agrarian 
a^-itators. It requires less tJiougJit to ascribe all social evils to 
one thing than to examine the actual sources of those evils. 

It has been said that as land is not a product of human 
exertion, no one can have a right to the individual ov^^ner- 
ship of any portion of it ; that land was created by the 
Deity as a free and valuable gift to all his creatures and 
that therefore, like the air and sunshine, all persons have 
an equal, natural-born right to its ownership and enjoy- 
ment. It is also said that the intention of the Creator was 
to provide land for the common use of all, and that this in- 
tention is defeated if the ownership of land does not exist 
in those for whom it was created, to-wit : all persons ; in 
other words, the State. It follows that the State is merely 

452 



A PLAUSIBLE THEORY. 



453 



a perpetual trustee for all the people and has no right to 
give, grant, or sell the ownership of land to any person 
whatsoever ; and that therefore, as a grant or sale of land 
by the State has no warrant in natural justice, all titles and 
evidences of individual ownership of land, under and by 
any State authority, are null and void. 

From the foregoing premises is deduced the statement 
that private ownership of a piece of land, no matter how 
small its size, is an infringement of the natural right of 
every person to be and remain a common owner of all the 
land ; and that any person who pretends to such ownership 
by virtue of any claim or title whatsoever, and forcibly 
maintains such pretense, commits an act as criminal as he 
that forcibly enslaves his fellow-man. One is a robber of 
land, the other a robber of personal liberty. It is also held 
that the aforesaid natural right in the common ownership 
of land is an inalienable one ; that no matter what written 
deed or covenant a person may solemnly sign, he and his 
descendants and all his fellow-beings still of right remain 
the joint owners of all the land in the State precisely the 
same as if no such pretended and fraudulent sale of land 
had been made. 

Moreover, it is said that land owners are a class with spe- 
cial and unjust privileges which enable them to derive a 
revenue from public property and grow rich by the toil of 
others. 

The logical conclusion of the foregoing train of argument 
is then reached, to-wit : that as the State is the rightful and 
perpetual owner of all the land within its borders, it should 
at once exercise this right by requiring all occupants of 
land to pay rent therefor to the State, this rent being the 
full rental value of such land. It is assumed that this pro- 
cedure would so enrich the commonwealth that no taxes of 
any kind whatsoever would be required. All taxation 
would thus be placed upon land, thereby creating so oner- 
ous a burden that many who now own and occupy real 
estate would be forced to abandon its possession. The 
State would thus soon have the disposal of " Free Land "; 



. c . SOCIAL STRUGGLES. 

that is, any one could have its possession and use by pay- 
ing the annual rental thereof. 

In other words, it is held that the State should at once 
treat all persons who claim individual title to land as crim- 
inals, and, by taxation to the full amount of rent derivable 
therefrom, virtually confiscate such titles for the public 
benefit. 

It is likewise held that, as all individual titles to land 
outrage natural justice, the State would be under no moral 
obligation whatever to make compensation to those who 
now claim its ownership. However, as a matter of ex- 
pediency and convenience, it is suggested that they be not 
ejected from the premises, but allowed to retain possession 
upon annual payment of their full rental value. The 
foregoing measure would also expunge all property now 
existing in form of mortgages on real estate. Ownership 
of a piece of land would then resemble ownership of a 
four-per-cent. government bond, the principal of which was 
never due and upon which an annual tax of four per cent, 
was laid. 

LET us THINK FOR OURSELVES. 

The intimate familiarity with the secret thoughts and 
purposes of the Most High, enjoyed by those who proclaim 
the foregoing doctrines, has been denied us. Nevertheless, 
we can consider some facts and principles relative to real 
estate. 

As it has been said that individual ownership of land is 
as wrong as individual ownership of sunshine, let us, in the 
outset, note the wide distinction between those two things. 

Sunshine needs no trustee, guardian, nor owner. Nei- 
ther care nor labor need be bestowed upon it. Human ex- 
ertion can neither improve nor injure the flood of light and 
warmth which, from a far distant sphere, comes streaming 
alike upon sterile wastes and cultivated lands, upon deso- 
late regions and populous cities. But the earth, originally 
a wilderness, is susceptible of improvement by human labor: 



CONDITIONS CREATE VALUE. 



455 



nay more, labor upon land is absolutely essential to man's 
existence and development. 

FROM WHENCE DOES LAND DERIVE VALUE? 

In Chapters VII. and VIII. we found that the idea of 
value — that is, the amount of advantage or benefit which it 
is supposed will be conferred by the ownership of a certain 
thing — does not depend simply and solely on the intrinsic 
qualities of that thing. Those qualities are only one of the 
factors which create the result we call " value." The amount 
of value which the ownership of a thing possessing definite 
intrinsic qualities brings and carries with it, depends entirely 
upon the circumstances and conditions in and under which 
such thing and the owner thereof are placed and situated. 

In other words, while each and every different thing on 
earth possesses intrinsic qualities more or less peculiar to 
itself. Value is not one of those inherent qualities. All 
things possess certain inside, or inherent, qualities, the value 
of which, at a particular time and place, are determined by 
their outside, or external, relations to mankind and to other 
things. 

Value is an extrinsic result of conditions, and may be 
defined as a judgment and appraisal of the importance of 
owning or using one thing, relative to the importance of 
owning or using the object of comparison, at a given time 
and place and under certain circumstances. A statement 
of such a comparison is a statement of value. 

The natural law which creates and governs value exempts 
nothing whatsoever from its perpetual influence. No mat- 
ter what possesses it, value is always an external relation 
of one thing to another, usually estimated by numerically 
comparing the extent to which its ownership or possession will 
presumably gratify human desires or supply human wants 
with the extent to which some other thing will perform a 
similar function. We estimate and state value by a numer- 
ical ratio simply because that is the only universal method 
by which the relative importance of all things can be com- 
pared. 



456 



SOCIAL STRUGGLES. 



LAND HAS NO INTRINSIC VALUE, 



In this way the importance of land ownership is esti- 
mated and stated. Like all other things to which a price 
may be attached, land has no " intrinsic value " whatsoever. 
It is valueless unless it gratifies a human desire or supplies 
a human want, and whether it can do this or not, and if so, 
to what extent, depends upon its surroundings, and the 
relation it bears to mankind. The market price of land is 
the means employed to express public opinion of the ad- 
vantage of owning a certain piece of it, compared with the 
advantage of owning a certain amount of money. 

Originally there was no land with a market price at- 
tached thereto. This was so because until an extrinsic 
value was conferred upon land by human exertion it had 
no value whatever. The idea that land inherently pos- 
sesses value is the fundamental mistake upon which rests 
the statement that " no one has a right to own the value 
created by the Deity." The fact simply is that the Creator 
did not see fit to create intrinsic value of any kind. He 
created various things with intrinsic qualities, but left to 
mankind the task of creating the extrinsic result, the sup- 
ply of human desires and wants which we call " value." 
For example : where to-day a valuable water-power exists 
a rapid stream flowed on for ages without the faintest idea 
of value being attached to its current. 

Doubtless an Infinite Power could have obviated the 
necessity of mankind laboriously making dams and, in fact, 
any other works. But He did not. It is idle to theorize 
with reference to imaginary things. The world as it is, the 
actual facts before us, should engage our attention. 

In the central portion of this city there is land which 
without any buildings thereon would readily sell for $250,- 
000 per acre. Within five miles of this high-priced 
land, there are large tracts which cannot be sold for $50 
per acre, and if their owners should offer to give them 
away, in acre building lots, to whoever wished to build 



CAUSES OF ALTERED VALUE. .ry 

houses thereon, no one would accept the gift. Yet these 
acres have the same intrinsic qualities as the land eagerly- 
bought at $5.00 per square foot, and three hundred years 
ago had the same value ; that is, both were substantially 
valueless. In New York City there are acres of land worth 
over a million dollars per acre. Yet it is comparatively a 
short time since all Manhattan Island could have been 
bought for a few red blankets. The conditions surround- 
ing this land are widely different from what they were 
then ; but its intrinsic qualities are unaffected by the ex- 
ternal changes. Its value has kept pace with altered con- 
ditions. 

The fact that there never was an acre of land with in- 
trinsic value is exemplified by the present value of land 
throughout the world. Land is valueless just in proportion 
as it remains in its original condition and surroundings. At 
the present time there are vast tracts of fertile land which 
cannot be sold for twenty-five cents an acre. Yet this land 
has the same intrinsic qualities as the land that, under dif- 
ferent conditions, sells for $100.00 per acre. Moreover, 
land, by the growth of favorable circumstances, may be- 
come very valuable, but this does not insure its remaining 
so. Whenever the conditions which gave it value cease to 
exist, it relapses into its primitive state. 

VALUE OF NEW YORK LAND. 

Let us test some common beliefs about land by a hy- 
pothesis which would place New York City under condi- 
tions similar to those which in the past have frequently 
isolated great cities from the channels of commerce. In- 
vention, discovery, wars and political transformations have 
often changed the course of the trade which nurtured a 
city and thus have simultaneously reduced its population, 
wealth, political power, commercial importance and the 
value of its lands to comparative insignificance. Instead of 
those causes, suppose an earthquake should immediately 
change the relation which Manhattan Island now bears to 
the United States. Suppose a channel should be opened 



458 



SOCIAL STRUGGLES. 



SO that the Hudson River would pass through the High- 
lands at West Point and empty its waters into a harbor in 
the middle of the New Jersey coast, far surpassing the 
present harbor of New York. Suppose this convulsion 
should rear a mountain chain in the lower Hudson valley 
and destroy the East River and the present New York 
harbor. 

What effect would the foregoing changes have upon the 
land now so enormously valuable ? Soon after the earth- 
quake commerce would begin in the new harbor. The 
population and capital now in New York would hasten to 
remove to a spot whose conditions better fitted it for the 
commercial centre of a great nation. The vast amount of 
labor heretofore expended on the land constituting Man- 
hattan Island would not sufifice to arrest its depreciation 
for a single day. Not another new building would be 
erected in New York. Land now valuable for residence 
purposes would be placed under conditions which would 
render it comparatively worthless. What is now deemed a 
very desirable kind of property — land on the chief business 
streets of New York — would then be unsalable at one-fourth 
the present price. 

Even if every square foot of land in New York were then 
owned by one man, such monopoly would not have the 
slightest effect in retarding the diminution of its value. It 
would fall in value for the same reasons and in the same 
manner that it would if individual ownership of land did 
not anywhere exist within that municipality. 

THE VALUE OF LAND DEPENDS UPON CONDITIONS. 

The above named events would occur because the aggre- 
gate of conditions which now give value to the land of New 
York City would largely cease to exist. The conditions of 
labor expenditure on the land and its private ownership 
would remain as at present, but they would not prevent a 
tremendous change in land values. 

It would then clearly appear that the amount of labor ex- 
pended upon municipal land and its individual ownership 



* 



LABOR MAY BE FRUITLESS. .eg 

are neither the sole nor even the dominant causes which 
give and sustain its value. Such land rises and falls in 
value just in the proportion that it fills and supplies a 
commercial, political, social and industrial want ; not 
merely of the residents of the particular city in which 
it lies, but of the nation, and in case of cities largely en- 
gaged in foreign commerce, a considerable portion of the 
population of the entire globe. Without labor expended 
upon it municipal land could not thus supply human 
wants. The broad distinction is, that such labor upon a 
tract of land is of no avail unless it creates conditions which 
harmonize with a multitude of other conditions and wants 
arising outside of it. In verification of this we have only 
to consider the history of land where large and wealthy 
cities once stood, whose ruin was wrought by events that 
placed other locations under conditions which gave them a 
greater fitness for the supply of human needs. 

Labor bestowed upon land is simply one of many condi- 
tions upon which its value depends. The same thing is 
true of an increase of population. It is not simply the 
mnnbcrs of the persons who dwell upon a certain area 
which determine its value. The swarming thousands of 
some Eastern cities inhabit ground of little value compared 
with that of other locations, like Newport, with a small pop- 
ulation. The character, ^\ealth and intelligence of those 
persons, and the relation they bear to the rest of mankind, 
are dominant factors. The location of a city, the facility 
with which its area can be enlarged, also has an important 
influence on the value of its lands. 

THE VALUE OF A CERTAIN PIECE OF LAND IS NOT IDEN- 
TICAL WITH THAT OF THE WORK PERFORMED 
THEREON. 

Whether labor shall raise the value of land upon which it 
is expended, or not, depends on the ultimate result of such 
labor ; viz., whether it places such land under conditions 
which will enable it to gratify human desires or supply 



460 



SOCIAL STRUGGLES. 



human wants better than it did before, and better than 
other lands with which it is in competition. 

If the value of land increased simultaneously with an in- 
crease of the labor spent upon it, there would always exist 
a measure by which the value of a particular piece could 
precisely be ascertained. The owner could simply show 
that a certain amount of work had been done on his real 
estate and the buyer would at once know its value. But 
such is not the case. Take the farms in the State of New 
York, for example. As a whole, those farms have a lower 
value to-day than would be arrived at if the original land 
were computed at one cent per acre, and the ditches, fences,, 
clearing off stone, buildings and other improvements were 
computed at the rate of fifty cents for every twelve hours' 
work thereon, the workman to board himself. In fact, 
many such farms can be bought at a price computed on 
the basis of one cent an acre for the original land, and 
twenty-five cents for each day's labor spent in fitting such 
land for human habitation and sustenance. 

Are the men whose patient toil has made these farms 
what they are " robbers " ? 

Similar facts are constantly presented in all our cities. 
Whoever will visit a city real estate ofifiice can readily find 
numbers of houses and lots for sale at prices less than the 
cost of building such houses, Avithout calling the lots worth 
one cent. 

The conditions which work upon land has created, rela- 
tive to human wants, personal property, and other lands, are 
the test and source of land values. 

. In the aggregate the lands in the United States have no 
greater value than that represented by the labor which has 
been spent upon them and a moderate interest on such 
labor. If all the labor bestowed upon land had been di- 
rected with the utmost conceivable wisdom and intelligence, 
for the express purpose of getting an equal pecuniary return 
therefrom, the present commercial value of real estate 
would more nearly equal its cost than it does. But, in fact, 
labor is seldom so directed, and consequently a portion of 



CHEAPNESS OF IMPROVED LAND. 



461 



it is comparatively fruitless. It necessarily follows that 
the existing value of land, as a whole, must always be less 
than the cost of the labor from which has sprung the con- 
ditions which confer such value. Therefore, the buyer of 
improved real estate becomes, on the average, for a given 
sum of money, possessed of more valuable land than he 
would if he had got the land in its primitive state and sur- 
roundings for nothing, and then made the improvements, 
with the average degree of intelligence, himself. 

Both upon land and personal property labor may be 
applied to the creation of conditions in such manner that 
the value so evoked will exceed the cost of the labor. But, 
as a matter of fact, the permanent improvement of land, on 
the average, does not create so large an amount of value as 
the cost of the labor thus employed ; that is, if the wages 
of such labor be reckoned at the rate usually paid for sim- 
ilar services. This anomaly is chiefly produced by three 
causes. 

First. Deficient judgment, knowledge and skill in the 
application of labor to land improvements. A combination 
of brute strength, industry and ignorance usually fails to 
produce the best possible results from a given amount of 
exertion. 

Second. The making of improvements for the gratifica- 
tion of individual fancy and the supply of individual wants, 
with little reference to the amount of commercial value 
thus produced ; that is, the value to the great majority of 
other persons. Expensive improvements are constantly 
being made which the maker knows would not sell for half 
their cost. From this fact has arisen the proverb: "Fools 
build houses for wise men to live in." What is true of 
houses is true to a considerable extent of all other kinds of 
land improvement. 

Third. The majority of those who own and dwell upon 
a piece of land soon acquire an affection for it. To them 
it is a home, it is something more than a piece of property 
which can be bought and sold with reference solely to the 
number of dollars given or received therefor. This senti- 



.52 SOCIAL STRUGGLES. 

ment inspires them to spend money or employ leisure time 
in making improvements on their grounds, even though 
they may know that such labor will not bring them a 
reward of ten cents for each day's work. In fact, such 
betterments are often made with little thought of the pe- 
cuniary benefit to be derived therefrom. 

RIGHTS IN PROPERTY. 

The ownership of both land and personal property is 
capable of subdivision into many degrees. But for our 
present purpose we shall divide vested rights in property 
into two broad classes. 

First. The right to possess and use a thing, personally. 
In this class may fairly be included the right to use the 
thing possessed, even if such use involve its destruction. 
Thus a farm tenant's right to fuel necessarily implies his 
right to consume it. 

Second. The absolute ownership of a thing, the right to 
lease, sell, exchange, or to perform any other act therewith 
not adverse to the rights of the public. For it is a sound 
legal maxim that no man has a right to so use his property 
as to thereby injure the estate or person of his neighbor. 

No one wishes possession of a thing unless he believes 
such right would gratify his desires or supply his wants to 
some extent. No one wishes to own a thing unless he 
believes such ownership would more -fully gratify his de- 
sires or supply his wants than its simple possession and 
use. The possession and use of a thing, without its owner- 
ship, may be and often is considered very desirable ; but 
such right is usually deemed inferior to the right of abso- 
lute ownership. 

WHY POSSESSION OF A CERTAIN PIECE OF LAND IS 
DESIRED. 

There has always been land the possession of which 
could be had without payment of price or rent. Men will- 
ingly pay rent for land only when they think its possession 
confers greater opportunities for obtaining wealth and 



LIMITS OF RENT. 



463 



other objects of desire than other land which can be had 
for nothing. Men willingly pay more rent for one place 
than for another simply because the additional benefit of 
possessing the higher- priced land is greater than the addi- 
tional rent demanded therefor. The natural rent of a 
piece of land is therefore less than the advantage given 
by its occupancy over the benefit which would arise from 
occupying land with a lower rent, or land free of rent. 

The amount of land within a given radius cannot be in- 
creased. Whenever a change in its surroundings causes 
such an area to furnish better facilities for commerce or in- 
dustry than it did, and better than lands with which it is in 
competition, the possession of such land becomes more de- 
sirable and the natural value of its rent is correspondingly 
enhanced. Whether the absolute ownership of such ground 
be in the State or in five thousand different individuals 
makes no difference with the natural rise of its rent. The 
want supplied by such land has been enlarged and intensi- 
fied, the conditions encompassing it have been so changed 
as to enable it to supply a greater need than it previously 
could. Its possession therefore confers an increased ad- 
vantage. 

Monopoly of the land within a small area enables the 
monopolist to increase its rental above the natural level. 
But there are limits beyond which such artificial price can 
neither be raised nor maintained. Suppose one man 
bought all the real estate on Wall Street, and at once ad- 
vanced his rents twenty-five per cent. : the advance would 
be paid only until other quarters could be obtained. In 
the end he might find his rents less than at first, because 
the business once transacted in Wall Street had moved 
and would not return. 

If all the land in a country were owned by one individual, 
he would not be subject to competition, and there would 
be no practical remedy against unfair prices and rents, ex- 
cept in restrictive laws or violence. If all the land were 
owned by the State, exorbitant rents could only be reduced 
by either a peaceful or a violent change in the national pol- 



464 SOCIAL STRUGGLES. 

icy. Far more fully than at present the tenure of every 
man's home would be dependent upon the manner in which 
government was administered. Officials would have greater 
power than they now have to show favoritism and to 
practice injustice. 

WHY ABSOLUTE OWNERSHIP OF PERSONAL PROPERTY 
IS DESIRED. 

Except to a limited extent, men are not satisfied with 
merely the right to possess and use personal property. 
This is so because a man can usually gratify his desires or 
supply his wants more fully by the complete ownership of 
a thing than he can by its partial ownership. Whenever a 
man, not in the employ of and receiving wages from an- 
other, performs labor upon a piece of personal property, 
the absolute ownership of such property is often necessary 
to enable him to obtain the full fruit and benefit of his toil.* 
As those who hire others perform work indirectly, it follows 
that in all cases the creation of value by work upon per- 
sonal property may fail of reward, unless such thing be- 
comes the absolute property of him who directly or indi- 
rectly has added value to it. 

In such case the value is not "intrinsic," but is 
associated with a particular thing. M is a shoemaker 
who buys a stock of leather and other materials with which 
to carry on his vocation. Upon this stock he works, and 
converts it into fifty pairs of shoes. By so doing value has 
been created. But this value is associated with the shoes, 
and, so long as it exists, cannot be separated from them.* 
How can M receive, as pay for his work, the value which it 
has created ? That he is fairly entitled to it very few will 
deny. 

It is apparent that M can make one or two pair of shoes 
to fit his own feet, and derive just as much benefit from the 

* In Chapter VIII. we have shown how the value of a thing may be 
altered or destroyed without changing the intrinsic qualities of such 
thing. But the value of a given thing cannot be sold or exchanged 
without selling or exchanging the thing itself. 



ADVANTAGES OF FULL OWNERSHIP. 



46s 



right to possess and use them, as he could from their abso- 
lute ownership. But, if his property in the remainder be 
restricted to personal possession and use, such limitation 
prevents him from doing the only acts whereby his labor 
can be fully rewarded, viz. : to sell or barter the shoes for 
such other thing or things as he may desire. 

Whether M have absolute ownership of the shoes or 
simply the limited ownership implied by only the right to 
their possession and use, makes a great practical difference. 
Absolute ownership does not prevent his converting the 
shoes to his personal use ; he can either sell, trade, or use 
them himself at pleasure. The greater right includes the 
less. 

But the mere right of possession and use debars him 
from exchanging them for something else, no matter how 
necessary such a trade may be. Depriving M of the right 
to sell or exchange the shoes is therefore equivalent to de- 
priving him of any reward for his work, except the small 
benefit from using them himself. 

Facts similar to those in the foregoing case exist when- 
ever a man directly, or indirectly bestows labor upon per- 
sonal property and thereby renders it more valuable. The 
labor has become inseparably associated with the thing made 
more valuable, and absolute ownership is essential to secur- 
ing any pay for his work, except to the extent to which 
such thing can be personally used. 

WHY ABSOLUTE OWNERSHIP OF REAL ESTATE IS 
DESIRED. 

Similar motives produce similar conduct. A man who 
converts bars of iron into a thousand horseshoes is not sat- 
isfied with the right to use those shoes on his own horse. 
He has worked on iron and created value, and this value 
every instinct tells him belongs absolutely to its creator. 
Men are not satisfied with the mere right to possess and 
use land, for the identical reasons which make them desire 
the complete ownership of personal property. They seek 
30 



^66 SOCIAL STRUGGLES. 

the full ownership of land because they want to own fully 
the value which their labor on that land has created. 

The foregoing considerations explain why it is that the 
earth's surface has been divided and made the subject of 
individual ownership. Land was originally held in com- 
mon as it now is by savage tribes. A sparse population, 
living a nomadic life and subsisting by gathering wild 
fruits, hunting and fishing, are satisfied with common land ; 
because, under such circumstances, the requirements of 
each man are met by an undivided interest in all the land 
and no definite, exclusive ownership of any part of it. 
Desire for division of land begins with the building of per- 
manent homes and the development of agriculture and the 
industrial arts. As soon as a man bestows considerable 
labor or carries on a particular industry upon a certain 
piece of land, his first impulse is to secure permanent pos- 
session of it, and his next desire its exclusive ownership. 
He first sees the advantages of permanent occupation, and 
finally learns that ownership of the land is requisite both 
to insure permanent possession and also to enable him to 
obtain the full benefit of the value which his labor has con- 
ferred thereon. 

Despotic force, for long periods and on a great scale, has 
often prevented the mass of mankind from enjoying the 
natural right of acquiring ownership of the soil upon which 
their labor has been spent. But the principle of justice 
that awards a man the fruit of his toil is eternal, and its 
perception cannot be permanently obscured. 

As land has no intrinsic value, it necessarily follows that 
when a man confers extrinsic value upon it by the creation of 
certain conditions, such extrinsic value not being separable 
from the land, can be oivned and fully enjoyed only by oivner- 
ship of the land upon whicJi such extrinsic value has thus been 
cojiferred. Otherwise the occupant of land which he im- 
proves creates value he cannot fully enjoy, because it is in- 
separably connected with something not owned by himself. 
It necessarily follows that to the extent which a man 
who permanently improves land is prevented from becom- 



A FEE AGE HUMAN NA TUBE. 



467 



ing the owner of such land, he is prevented from enjoying 
the fruit of his own labor. Denial of private ownership of 
latid is therefore denial of a man's right to the full fruit of 
the work he has performed in permanently improving it. 
When it is admitted that a man is entitled to the full en- 
joyment and benefit of his own labors, it necessarily follows 
that a man who drains a worthless swamp has a right to 
previously become its owner. Otherwise his labors mostly 
inure to the owner of the swamp ; and if no one but the 
State have a right to own land, the chief advantage of his 
toil would accrue to the public and not to himself. 

It is possible to conceive of persons so constituted that 
they would work just as diligently and practice as much 
self-denial and ecorfomy in creating wealth for 'the State as in 
producing wealth for the benefit of themselves and families; 
but as the appearance of any considerable number of such 
persons is not expected this year, our laws and institutions 
should be adapted to the present disposition of mankind. 

It is true that men have rented land and made perma- 
nent improvements thereon. But, from choice, a man sel- 
dom becomes a mere tenant of land that he expects to per- 
manently improve and occupy. He prefers to own the fee, 
because limited ownership and control of a thing are less ad- 
vantageous than full ownership and control. 

IF THE PRESENT OWNERS OF LAND RETAINED ITS POSSES- 
SION AS TENANTS, HOW STATE OWNERSHIP, WITHOUT 
COMPENSATION, WOULD PRODUCE INJUSTICE. 

In illustration of this, let us outline a familiar series 
of events. H is a young farmer who settles upon 160 
acres of wild land. He works upon this land for twen- 
ty-five years, and the previously worthless tract has then 
become a productive farm. Trees and bushes have been 
cut down, stones removed, tough sod and tangled roots 
changed into mellow soil, orchards have been planted 
and reared, and fences, buildings and other improvements 
made. 

The farm has then a considerable market value. This is 



468 



SOCIAL STRUGGLES. 



SO for two reasons. First. The labor of H has created 
value by putting the land in such a state of cultivation, 
under such conditions, that the application of a given 
amount of labor thereon will yield a larger amount of valu- 
able produce than before. Value has also been created by 
building a house and barns to shelter himself and family 
and his domestic animals from inclement weather. Sec- 
ond. The adjacent lands have been occupied by other 
farmers ; the whole vicinity has been improved, and 
school-houses, churches and facilities for social and com- 
mercial intercourse and association with the rest of man- 
kind have alike followed and formed a part of the general 
improvement. 

The labors of the surrounding population have undoubt- 
edly made the land of H more valuable than it could pos- 
sibly have become solely from his own exertions. But the 
value thus impressed upon the land of H belongs justly to 
him ; because, while the neighbors were raising the value of 
his land, he was raising the value of theirs. He contributed 
as much to the wealth of others as others contributed to his 
wealth. The growth of the nearest city added to the value 
of his land ; but a portion of the source from which that city 
derived its growth and wealth consisted of the products cre- 
ated by his labor and farm. 

To those familiar with the hard facts of the life of farm- 
ers, it seems ludicrously absurd to imagine that their own- 
ership of land makes them " a class with special privileges." 
On the average, no persons have done more hours of hard 
labor for each dollar's worth of property they possess than 
the farmers, and no class has contributed more to the gen- 
eral welfare and prosperity of the country. 

If H were to perpetually remain in health and strength ; 
and if he should always wish to live in his present home ; 
and if ih.Q amount asked for rent were no greater than 
the sum previously paid for ordinary taxes; and if no one 
could, by offering a higher rent, obtain possession at once 
of the farm and of the life-long labor of H ; and tfYl never 
wanted to borrow money and pledge the farm as security, 



EFFECT OF CONFISCA TION. 



469 



it would make comparatively little difference should the 
State confiscate the full title to the land and thereafter 
make him pay rent as a tenant. 

Should the amount of such rent be the rental value of 
the land ''irrespective of improvements," it would be less 
than the ordinary taxes — in fact be substantially nothing, 
because the land could not then have been rented for five 
cents an acre. The phrase, "the full rental value of the 
land," must therefore mean the full rental value after im- 
provements were made upon and near such land. If such 
rent be charged, H would be little better off than a new- 
comer who should step right in and rent the land upon 
which H has spent so many years of hard toil. 

But, in fact, it is certain that H will eventually become 
unable to work. He will then, directly or indirectly, wish 
his support from the income or the principal of the value 
added by his labor to the farm. Events may lead him to 
desire to sell the farm and remove to another place. One 
incentive to labor and economy has been the idea of 
making provision to protect his family from poverty and 
hardship. 

But this purpose will be defeated if the full title to the 
land be taken away. H can then neither rent his farm, bor- 
row money on it, sell it, nor transmit it to his children. 
Under the full sanction of law, public opinion and the 
Church he has patiently toiled on year after year and cre- 
ated value beneficial not only to himself and dependents, 
but also to the whole community. The State now ruth- 
lessly robs him of the greater portion of his earnings. 

This theft has been advocated, on the ground that all 
lands should be confiscated for the purpose of punishing 
those who buy tracts and let them lie idle for the sole pur- 
pose of getting the valuable result of conditions created by 
the labor of actual owners and occupants upon adjacent 
lands. Let us suppose, for argument, that the ownership 
of unimproved land is wrong. Does it follow that the ad- 
joining owner, occupant and improver of land should there- 
fore be punished by taking away from him the land his toil 



470 



SOCIAL STRUGGLES. 



has improved ? Should A be robbed because B has done 
wrong? Ought the owner of a vacant lot to be punished^ 
because he lacks means to build a house thereon ? 

PRIVATE OWNERSHIP OF THINGS. 

It has been said that man cannot justly become the 
owner of land, because land was not made by man, but by 
the Creator. 

Iron, lead, copper and various other metals were made by 
the same Being who created land. Is private ownership of 
those metals wrong? A man who works upon one of these 
metals not created by human agency, and adds to its value, 
is deemed entitled to ownership of the value thus created. 
Furthermore, a man is considered entitled to buy, sell and 
exercise absolute ownership over those metals, without re- 
gard to the greater or less value his labor may have added 
to them. Land stands in the same relation to man as all 
other things created by the fiat which brought forth the 
world. 

Traced to their source, all forms of wealth and every en- 
joyment are found due to the creative power of the natural 
laws and forces which the Great Benefactor has seen fit to 
establish and maintain. But, because the growth of wool 
was ordained by the Deity, does it follow that the man 
whose labors are spent in the care of sheep has no more 
right to their fleece than he who spends his time in idle- 
ness? 

Man did not, nor cannot, create wheat. But labor spent 
in harmony with natural laws can cultivate wheat. Is own- 
ership of grain, the production of which would be impos- 
sible by man's labor alone, a public injury? 

The Lord created all kinds of animals. But does this 
fact prove that private ownership of a cow or a horse is a 
crime ? Does it show that all domestic animals should be 
owned by the State and rented to individuals? 

It has been said that a man's private ownership of land is 
necessarily an injury to all other men. This is equivalent 
to saying that it is a public injury to allow a man to reap 



WHA T PO VER TV IS. 



471 



the full benefit of the labor which he has so performed as to 
make its value inseparable from the land upon which it has 
been spent. Such a saying assumes that work devoted to 
the permanent improvement of land is so much less merito- 
rious than other forms of labor, that it is contrary to public 
policy to allow its full reward to be received by him who 
performs it. 

The attempt has been made to prove that private owner- 
ship of land is in itself an evil, by asking : "What would 
happen if one man owned all the land in the world and 
refused to sell or rent any part of it?" Many questions as 
absurd as the foregoing could be asked without proving any- 
thing but the folly of the questioner. It might be as- 
serted that the private ownership of grain and all kinds of 
seed was a public injury, and in proof thereof it might be 
asked : " What would happen if one man owned all the grain 
and seed in the world and refused to let any one have a 
particle of them? " Such puerile questions ignore the broad 
distifiction between things bad in themselves and the per- 
version and abuse of good things. 

The earth contains land enough for all the dwellers 
thereon. If one man have absolute ownership of a portion 
of the earth, he does not thereby necessarily debar other 
men from ownership of land. Such a claim is groundless. 
In all quarters of the earth there are immense tracts of 
vacant land to be had for nothing, and improved land can 
be had for less than the cost of the labor spent in making it 
habitable and productive. 

It is not merely the lack of land which constitutes pov- 
erty. ' The owners of large tracts of land often suffer terri- 
bly from want of the bare necessaries of life. Land, in itself, 
is valueless unless combined with labor and capital. The 
cry of distress which so often arises in all quarters of the 
globe is not simply a cry for land. Capital of various kinds, 
tools for creating wealth, sustenance, warmth, clothing and 
shelter are what are needed, and the absence of which 
makes mankind so helpless. 

If one man own a large amount of land, and unfairly hin- 



.y2 SOCIAL STRUGGLES. 

der other men from becoming the owners of the ground 
requisite for their needs, without doubt he injures other men. 
The same thing becomes true of the ownership of a large 
amount of money, machinery, railroads, provisions, or any 
other kind of personal property, when so used as virtually to 
be a source of oppression. Private ownership of personal 
property is constantly employed as a means of extortion, 
and private land ownership is also used to inflict wrong. But 
in both cases the private ownership is not, of itself, the es- 
sence of the evil. The wrong is simply a misuse, a perver- 
sion of a man's natural right to create and own the wealth 
which is separable from land and is therefore called Per- 
sonal estate, and to create and own the form of wealth 
which is inseparable from land and is therefore called Real 
estate. 

Like all other rights, the right to acquire wealth has lim- 
itations. Its perversion occurs whenever a man so exer- 
cises it that the just rights of other persons are thereby en- 
croached upon. But whether such abuse of a natural right 
take place with reference to land or personal property 
does not affect the character of such act. Either case im- 
plies the existence of conduct which should be made the 
subject of legislative correction. 

Recognition of the bad effects of a monopoly, in few 
hands, of immense amounts of land does not warrant us in 
drawing false conclusions therefrom. Such conceded facts 
form no greater reason for denial of a man's right to own a 
homestead or a reasonable amount of land, than the pos- 
session of an immense amount of money by one man, with 
its inevitable evils, forms a valid reason for entirely abolish- 
ing private ownership of money. Finding that a person is 
sick does not justify prescription of a remedy which will do 
more harm than good. 

RISE OF LAND IN VALUE. 

Many believe that the owner of land, which the growth of 
surrounding conditions causes to rise in value without his 
directly spending labor thereon, is not equitably entitled to 



INCREMENT OF MONEY. ^y-^ 

such enhanced value, because it is not solely the result of 
his own efforts. Let us consider this proposition, with the 
aid of an illustration which will compare such increase of 
wealth with another form of augmented wealth without 
labor, which few condemn. 

A buys a small field, covered with brush and boulders, for 
$200, and then spends a large amount of work in converting 
it into a pasture. B lives adjoining this field and wishes to 
obtain it for a cow pasture. He has saved $1000 from his 
earnings and with it buys the field. At the time of such 
purchase B knows that the yearly value of the pasture is 
much less than the interest of the $1000 paid for it, but 
the land lies on the outskirts of a growing village and he 
expects will eventually be wanted for building purposes. 

A puts the $1000 received for the land in a savings bank 
and allows it to remain there undisturbed for twenty-five 
years at compound interest. At the end of that time he 
finds himself, without having added either money or labor 
to his original investment, worth $4000. 

Meantime, B has kept the field and pastured his cow there- 
on ; the yearly value of the feed being but little more than 
the cost of fencing. The village has steadily grown. Pub- 
lic buildings, bridges, grading and other improvements have 
been demanded, and taxes in increasing amount have been 
yearly collected. When the twenty-five years have ex- 
pired, B sells his land for $5000. At first sight it appears 
as if he had made a large profit, but computation shows that 
he has expended on its account, for taxation and assess- 
ments, a total of $1000. 

The result of these transactions is that A, without adding 
labor thereto, has converted $rooo into $4000; and B has 
converted $2000 in like manner into $5000. Each one has 
received $3000 for which he gave no labor directly in re- 
turn. The difference between the conduct of A in putting 
his money in the savings bank, and B in putting his money 
in the ownership of a field, was simply in the mode in which 
their capital was invested. Is not B entitled to his $3000, 
just as truly as A is entitled to his? One is the " unearned 



.y. SOCIAL STRUGGLES. 

increment " of money just as truly as the other is the " un- 
earned increment " of land. 

On the average, throughout considerable periods of time, 
the " unearned increment " of money far exceeds any rise 
that has ever occurred in the value of land. If land in- 
creased in value faster than money at interest, men could 
incur debts equal to the purchase price of land and still 
make a fortune from the rise of real estate. A few shrewd 
persons, under exceptional circumstances, have made money 
by running largely in debt for land ; but an overwhelming 
majority of such debtors have become bankrupt. 

In the words of a millionaire banker : 

" In the end, on the average, no one makes as much money as the 
man who resolutely keeps all his savings and profits in form of money 
and interest bearing evidences of indebtedness. A man heavily in debt 
and trying to make a profit out of any investment or business is like a 
swimmer struggling against the tide ; in nine cases out of ten, the steady 
force of interest will gain the mastery." 

It needs but little computation of the rate at which 
money increases to demonstrate the correctness of the 
above opinion of a veteran and capable observer. 

SOME FACTS CONCERNING REAL ESTATE. 

Undoubtedly there are numerous instances of individ- 
uals growing rich from their land, in particular locations 
and under special circumstances, rising to a value greater 
than its total cost. But, in connection with this, several 
facts should be considered. 

First. The land which has so risen in value as to bring 
large gains to its owners forms a comparatively small por- 
tion of the total area upon which an expenditure of capital 
has been made. Profitable investments in land are more or 
less counterbalanced by others in which losses have been 
sustained. People who have never before examined the 
subject are usually surprised to find that their attention had 
been called to only one side of the result of spending 
money on land. Success is proclaimed with trumpets. 
Failure silently passes into oblivion. 



NEED OF FAIR DEALINGS. 475 

Like all other modes of investing capital and labor, in- 
vestments in real estate contain an element of risk. They 
may be profitable, or unforeseen events may cause them to 
entail heavy losses. States have never pursued the policy 
of reimbursing citizens for the losses sustained from real- 
estate enterprises. Would it be either wise or fair for a 
State to adopt a policy which should virtually say to her 
individual citizens : " Make investments of labor and capital 
in real estate. If they do not pay, you must bear all the 
losses ; if they are profitable, hand over the gains to me, 
— they are ' unearned increment ' and justly belong to all 
the people," 

Second. Under the American system of law, nearly all 
the lands which have profitably risen in value have each 
and every day, while this rise was in progress, been for sale 
at their market price on those different days. Persons who 
invested capital in other forms did so because, in their judg- 
ment, such investments would yield a larger profit than 
land. 

Land is constantly changing owners, and it is rare to find 
one piece remaining in the same hands for a considerable 
time. Arguments based on the theory that the present 
owners of land originally got it for nothing, except in com- 
paratively few cases, are utterly false. A large portion of 
all the land in this country changes owners every ten years ; 
and every generation witnesses a change in ownership of 
the major portion of real estate. 

Third. Many investments in land, which at first sight ap- 
pear profitable, are found not so when a computation is 
made of the expense incurred for taxes, grading, sewers, 
pavements, buildings, and the interest on all sums so ex- 
pended. The apparently profitable land has simply served 
as a savings bank into which money and labor were contin- 
ually put, and allowed to remain undisturbed at a low rate 
of interest. Many families, moderately rich long ago, have 
largely increased their wealth by steadily keeping all their 
available means, for two or three generations, invested in 
real estate within growing cities. In most of such cases the 



4/6 SOCIAL STRUGGLES. 

yearly percentage of the rise of such land has been less 
than its price would have returned if otherwise well in- 
vested. The final result is due to diminished temptation 
to consume income, because the profits were continually in 
form of the same real estate with an enhanced value. 
Three per cent, per annum saved, increases a fortune more 
than nine per cent, .per annum received and spent. 

Fourth. Investments, both of money and labor, are con- 
stantly being made in a great variety of forms, which not 
only repay the amount so invested and a fair interest 
thereon, but also yield a profit. This profit, which may be 
called '' unearned increment of business," is chiefly due to 
the cause which is most potent in enhancing the value of 
land, viz. : the advance in science, art, mechanical skill and 
kindred things, which are at once a source and a portion of 
the progress of mankind. Those who enjoy comforts and 
luxuries or receive profits from personal property which 
would have been impossible without the steadily increasing 
mastery over natural forces and consequent wealth which 
society is acquiring, and workmen who get more necessaries 
for a day s labor than for7iierly, occupy a position similar to 
those who gain by a rise in the value of land. An increase 
in the value of land, in a given place, occurs simultaneously 
with the development of invention, a better quality and 
greater variety of personal property, and greater ease of 
obtaining the necessaries and luxuries of life. 

Within reasonable limits, is not a man whose intelligence, 
savings and labor form one of the factors of the general 
increase of the world's wealth, and who contributes to the 
individual comfort and wealth of others, entitled to a share 
of this additional wealth ? 

On the average, those whose capital and labor are 
devoted to the care and improvement of land, contribute 
as much to the comfort and wealth of those whose means 
and energies are spent in adding value to personal 
property, as these latter persons contribute to the wealth 
of land owners. A State policy which debarred the owners 
of land from fairly participating in the increasing wealth 



WHO MAKE MOST MONEY. 



A77 



of mankind would therefore be both unjust and impoHtic. 
In the outset it would commit a wrong to those who 
had been acting in good faith under laws previously existing. 
Thereafter it would offer a premium for men to engage in 
pursuits other than improvement of land. If those now en- 
gaged in creating value by improving land should be legally 
discriminated against, a speedy reduction in their numbers 
would inevitably follow. 

HOW GREAT FORTUNES ARE USUALLY MADE. 

Some persons imagine that the rich have obtained their 
wealth by monopolizing land, thus levying tribute from a 
large number of persons. But a little reflection will show 
that such conduct is ordinarily only possible to those who 
are already rich. The rich men of this country have mostly 
become so by themselves or their ancestors dealing in per- 
sonal property. More than half the total wealth of the Unit- 
ed States is owned in a few cities and is chiefly in the hands 
of persons skilled in buying, manufacturing, managing and 
selling personal property. To such men it matters but 
little who owns the land, so long as they can compel all the 
products of both land and labor to pay them a liberal com- 
mission for their services in handling and distributing such 
products to the consumers thereof. Fair payment for such 
services is equitable. But it should be remembered that a 
value equal to about one-fifth the total wealth of this coun- 
try is yearly produced, and a slight percentage of over- 
charge for services rendered in its distribution amounts to 
a very large sum. 

The first thing sought by a bright young man, eager 
for great wealth, is not the ownership of land, but a po- 
sition where the valuable things created by the labor 
of a large number of persons upon land and its prod- 
ucts shafl constantly and speedily pass through his 
hands and pay toll for their passage. Investments which 
require several years to ripen and bear fruit he avoids. To 
practically increase the power of his slender capital by rap- 
idly changing it from one form to another, each time mak- 



478 SOCIAL STRUGGLES. 

ing a profit, is the object desired. For example, the value 
of a bale of wool may be enhanced by transporting it from 
Iowa to a woollen mill in Massachusetts. Its value is still 
further increased by converting it into cloth. The transpor- 
tation of wool and its manufacture are analogous acts. 
Transportation changes the location; manufacture changes 
the form. In both cases the circumstances under which 
the wool has value — its relations to other things — are 
changed in a short period of time. The value added to the 
wool by manufacture is far greater and occupies much less 
time for completion than the value created by the farmer 
from whose sheep the wool was shorn. 

A large portion of the wealth of the world is created and 
distributed by the association of land, labor and their first 
products with two things : Money and its representatives, 
and the Machinery of transportation and manufacture in 
their various forms ; and transportation properly includes 
the passage of goods through the hands of wholesale and 
retail dealers. In a previous chapter we have discussed 
in detail the fact that value is not simply and solely the 
product of labor, but is a result of conditions. Money and 
Machinery are the means by whose use labor can most 
easily and rapidly produce value-creating conditions. 
Therefore, whoever to any considerable extent obtains the 
ability to buy, manage and sell one or both of these potent 
agents is in a position to which both land owner and 
laborer are alike compelled to render tribute. 

The possessor of money and machinery may grow rich 
from their income without owning land. But the owner of 
land is comparatively helpless without the aid of money 
and machinery. 

The abolition of all private ownership of land would not 
lessen the power of those who control both money and 
machinery. On the contrary, if all the burden of taxation 
were placed upon land, by making its occupants pay the 
full rental value to the State, the domination of the owners 
and managers of money, transportation and manufacture 
would be far greater than at present, because they would 



HE A VIER TAXES ON THE POOR. . yg 

pay less taxes than they now do, and this would tend to 
still further increase their wealth. The tendency for young 
men to leave the farm for the city would be greater than at 
present, because the advantages of middlemen would be 
relatively increased. 

A trader's or a manufacturer's goods are protected from 
theft and fire by an expensive police and fire depart- 
ment ; the judiciary enables them to enforce contracts ; the 
lighthouse guides their vessels on the way, and in many 
other ways their business is protected and aided by gov- 
ernment. But if all taxation were imposed on bare land, 
the thing which needs neither policeman nor fire-engine, a 
man could enjoy a large income from personal property 
without bearing his rightful portion of the expenses of gov- 
ernment. Such a system would increase the present dis- 
parity of wealth. The burdens of the poor would be rela- 
tively greater,, and the rich would grow richer with more 
ease than at present. 

HAS A PERSON A RIGHT TO INHERIT LAND ? 

It may be said : " L owns a farm worth one hundred dol- 
lars an acre. He inherited this land from his father. The 
father inherited it from L's grandfather who bought it in 
the wild state for two dollars an acre." 

In such case it is absurd to presume that because a man 
buys a tract of wild land for a nominal sum, he therefore 
gets a cultivated and valuable farm for nothing. L's farm 
owes its value chiefly to the labors of his ancestors upon it. 
It is true that L has inherited the value created by his an- 
cestors by labor upon land. But there is no real difference 
between such an inheritance and the inheritance of an 
ancestor's labor in form of money or other personal prop- 
erty. 

It is urged that all lands should be owned by the State 
for the purpose of " giving all children an equal oppor- 
tunity." But, is it not certain that so long as one child in- 
herits more of anything whatsoever than another, " equal 
opportunities to all" cannot exist? 



48o 



SOCIAL STRUGGLES. 



If a man have no right to transmit to his children the 
value his labors upon land have created, then it follows that 
a man who creates value by labor upon personal property 
has no right to give such value to his children. In short, 
no one has a right either to devise or inherit property of 
any kind. A powerful incentive to industry and economy 
would be destroyed if the right to give or bequeath prop- 
erty were abolished. 

Proceedings which would confiscate land, for the pur- 
chase or improvement of which a man had painfully ac- 
cumulated the savings of many years, would be a hideous 
wrong. Is it not also clear that it would be unjust to de- 
prive a family of land from which the State has, in the ag- 
gregate, in form of taxes and assessments, drawn a large 
sum, where no income would have arisen if it had always 
remained in the hands of the State ? Such taxes have been 
paid on the theory that the individuals owned the land. If 
the State now declare to the contrary, is it not in honor 
bound to refund taxes the collection of which would have 
been impossible if the assessed land had not been in private 
hands? 

AVERSION TO LAND OWNERSHIP. 

If the ownership of land bring such great profit as some 
imagine, why is it that so large a portion of our population 
are averse to owning real estate and bestowing labor upon 
it? 

Some kinds of business can only be engaged in by a com- 
paratively small number of persons, possessing a franchise, 
a large capital, special skill, or all these requisites. But a 
man may become a real estate owner with a very small cap- 
ital, without a charter, and without first making a large ex- 
penditure of time and money in mastering the principles 
and details of a special business ; moreover, no limitation is 
placed on the number of persons who may own land. 

Notwithstanding all this, many quite wealthy persons 
prefer not to own their homes or places of business ; and 
many of the richest firms in the world have nothing what- 



LOVE OF CROWDS. ^gj 

ever invested in land as a source of profit. Furthermore, 
multitudes of the poorer classes prefer to be tenants at a 
high rent in crowded cities, rather than to live in the coun- 
try on land of their own or in villages at a low rent. A 
considerable number of persons, constantly in miserable 
poverty, stay in large cities, because ignorant where to go to 
better their condition. But multitudes of such people re- 
main in crowded quarters from choice. So long as 
mankind will persist in herding together in great numbers 
within narrow limits, the demand for space and shelter 
within those limits must be great and their price propor- 
tionally high. No scheme has been suggested which would 
obviate this.* 

HOW SHALL CHOICE OF LANDS BE MADE? 

Until men love their neighbors as themselves there must 
always be brisk competition for first choice of the most 
fertile lands and those most desirably situated for business 
or residence. If individuals were debarred full ownership 
of land and all occupied the position of tenants of the 
State, the contest for choice of lands and location of lots 
would remain. State ownership of land would not change 
the present desire of mankind to acquire wealth ; and the 
possession of a piece of ground, suitable to the wants of its 
occupant, then as now, would be an important factor in the 
successful prosecution of any business. 

Suppose the State owned all the land and should let to A 
one-eighth of an acre of land situated on the corner of Broad- 
way and Wall Street ; and should let to B a lot of the same 
size situated in Tarrytown. It is evident that as the lot on 
the corner of Broadway and Wall Street affords more and 
greater opportunities for acquiring wealth than the Tarry- 

* Query : Would it be practicable, as a sanitary measure, to enforce a 
law which decreed the number of persons permitted to inhabit each 
thousand square feet of land ? In other words, could the over- 
crowding which now exists upon many acres of each large city be rem- 
edied and prevented by legal limitation of the population allowed to each 
acre ? 



482 SOCIAL STRUGGLES. 

town lot, if A and B were charged the same rent, gross in- 
justice would be done. How shall a choice of locations be 
determined ? How shall it be known whether R or S is to 
have first choice of two adjacent farms, one of which is far 
more fertile than the other ? 

Individuals might bid for choice and the award be made 
to the highest bidder. But that would be similar to the 
way lands have heretofore been selected, without its ad- 
vantages. At present a man able and willing to pay more 
for a certain piece of land than any one else usually obtains 
it. The manner in which lands have been divided is chiefly 
due to the fact that their owners were willing to give more 
for particular pieces than any one else ; otherwise, some one 
other than the present owners would have got them. 
Under a competition for the hire of land, it would be said 
that the rich and strong got first choice and hired all the 
most desirable lands, leaving the poor and the weak to- 
occupy the most sterile lands and those where opportuni- 
ties to obtain wealth were the fewest. 

Farms and building lots could be apportioned, without 
competition, to different individuals every year by State ofifi- 
cials. In such case the division of land would resemble 
the present method of awarding political offices after a Pres- 
idential election. Those who had most political influence 
would obtain first choice of the most desirable lands, and 
would pay no more rent than other persons were charged 
for land of inferior value. The tenure of a man's home 
would not then depend as much as at present upon his in- 
dustry, economy and capacity to create wealth. 

Temptation to oppression and wrong would then be far 
greater than under the present system of selecting lands, 
because bidders for a particular piece would stand on 
more unequal grounds of advantage over one another. 
Under State ownership of all lands, suppose M has rented 
ten acres of land for five successive years. When he first 
rented this field its rental value was ten dollars per year. 
Part of it was a swamp and the rest covered with large and 
small boulders. Soon after obtaining possession of this 



i 



AN UNFAIR SYSTEM. 



48: 



field M goes to work upon it, and for five years thus occu- 
pies all the time he can spare from a vocation from which 
his daily bread is earned. 

The result of the patient industry of M is that the field 
has been fenced with large boulders blasted and laid into 
wall ; the swamp has been underdrained by ditches filled 
with cobble-stone, and the ground has all been deeply 
plowed and conyerted into mellow, fertile soil. The land 
which at the beginning of M's lease was worth only ten dol- 
lars a year has become worth eighty dollars a year. 

The time arrives for a renewal of the lease of this field. 
In the first place, would it be just for the State to raise the 
rent of M and oblige him to pay the " full rental value " 
of what his own labor has created ? Obviously it would 
not. How then is the doctrine that all lands should be 
rented at their " full rental value" to be maintained? 

Secondly. Would it be right to allow a man who has 
never done an hour's work on this land to compete on equal 
terms with M and bid for its future possession ? To an- 
swer this question in the affirmative would be equivalent to 
saying that M was not entitled to any more consideration 
from the State than a man who has spent his last five years 
in idleness. That would be placing a State bounty on idle- 
ness. 

AN IMPRACTICABLE SCHEME. 

With intent to make State confiscation and State rent 
of land appear equitable, it has been said that the rent paid 
the State should be levied only on the land " irrespective of 
improvements." But what is meant by the term " im- 
provements?" N spends $5000 worth of labor by digging 
ditches, removing stone, and kindred labors, in order to con- 
vert a previously worthless tract into productive ground. 
O spends $5000 by putting a house on a village lot. If the 
building should be exempt from rent, ought not the land 
of N also to be exempt ? 

Here is a city lot on which no labor has been directly 
spent. But for many years it has been taxed for bridges, 



484 



SOCIAL STRUGGLES. 



streets and other adjacent works. Has not such a lot been 
" improved " just as truly as if its owner had spent money 
directly upon it? And if " improvements " ought not to 
pay State rent, would it be just for the " full rental value " 
of such lot to be charged against its possessor? 

It is evident that if the absolute title to all lands be 
placed in the State, those already in possession of lands 
upon which they have expended labor will be unfairly dealt 
with if strangers, without restriction, be allowed to bid 
against them for possession. What should be done to 
make the bidding on each lot of land fair and equal, so that 
all have equal opportunities to rent a certain piece, would 
be an intricate and practically insoluble problem. 

A rich man, sometimes, has a spite against a poor man 
and would like to compel him to move away. In such case, 
if all lands were rented by the State to the highest bidder, 
what chance would the poor man have to get his lease of a 
home, near the rich man, renewed ? 

Without compensating benefits such a system would 
destroy all the advantages of the present mode of holding 
lands. In the outset, every savings bank, insurance and 
trust company in the country, with a large portion of its 
assets invested in real estate mortgages, would immediately 
become bankrupt. Seizure by the State of the lands of the 
debtors of those institutions would render such debtors un- 
able to pay either the interest or the principal of their obli- 
gations. The loss thus occasioned would fall at once on 
every depositor in a savings bank and on all who were 
previously protected by an insurance company. 

THE TRUE PRINCIPLES OF TAXATION. 

Levying a tax always implies infliction of a penalty in 
case of non-payment. This penalty usually consists in tak- 
ing the thing taxed away from its possessor and selling it to 
some one who will pay the tax. A tax upon land of its 
rental value implies that failure to pay such rent will be 
followed by eviction from the land so taxed. The blessing 
of a home free from rent would then be denied to all. 



STATE INJUSTICE. 485 

The advocates of such a poHcy tell us land was created 
and intended as a gift to all persons, and should be as free 
as the sunshine. If that be so, what right has a State to 
tax what the Lord intended as a free gift, or to dispossess 
an occupant of necessary land if such tax be not paid ? 
Has a State a right to tax sunshine and deprive men who 
fail to pay such tax of the light ? 

Those who affirm such propositions fail to see that injus- 
tice practised by a State toward an individual is just as 
criminal as wrong inflicted by one man upon another. 
State encroachments on individual rights are, in fact, more 
odious than private ones. Compared with a single citizen 
the State has overwhelming power ; and its unjust exercise 
is as mean and cowardly as theft by an athlete from a blind 
cripple. 

The true principle is that taxation should always perform 
a double duty. First, A revenue for the support of gov- 
ernment. Second. The repression of conduct and the 
abatement of things adverse to the public interests. 

A man's first duties are to his family and himself. The 
State should not make these primary duties more difficult 
by taxing any of the necessaries of life. 

The necessity for the major portion of the enormous rev- 
enue needed by government arises from vice and folly in 
their various forms. As far as possible, the causes of taxa- 
tion should bear the burden of taxation. All public revenues 
should be drawn from taxes upon conduct and conditions 
more or less inimical to the general welfare. Luxuries, 
vices, follies, excessive wealth and, in short, all conduct, 
either of citizens or foreigners, which tends to generate in- 
justice and evil should be taxed as far as practicable. Such 
a system of taxation would necessarily have a correlative 
effect, viz. : the encouragement of virtuous acts by freeing 
them from public burdens. 

Instead of a policy which would make it impossible for any 
individual to ever become the absolute owner of a home- 
stead, that would make mankind more nomadic and lessen 
their interest in and affection for their homes, the State 



486 



SOCIAL STRUGGLES. 



should encourage every man to get a piece of ground and a 
home of his own. To this end, all homesteads, to a limited 
amount of value, should be exempt both from taxation and 
from attachment for debt. The tendency of such a meas- 
ure would be to quietly and silently prevent and cure the 
evils of a monopoly of land by a few, as well as the evil of a 
tenant population with little interest in the soil upon which 
their toil and lives are spent. 

FOLLY OF INVARIABLE TAXES. 

Placing all taxation on land has been urged on the ground 
that such a measure would make each man's taxes as " cer- 
tain and invariable "as is practicable to levy them. But 
this is precisely the reason why neither taxes on land or 
any other form of taxes upon necessaries should be laid. 

If each and every man's health, business, income and ex- 
penses were " certain and invariable," it would then be 
proper to collect " certain and invariable " taxes. But, in 
fact, the ability of the great majority of persons to pay a 
certain amount of tax, without more or less pecuniary dis- 
tress being occasioned thereby, varies from year to year. 
Both income and expenses are subject to great fluctuations 
from a variety of causes. 

Diminished resources often make it imperatively necessary 
for a great number of persons to economize in every pos- 
sible way. When taxes are laid on things absolutely 
essential to comfort and existence, it is impossible to 
materially lessen their burden. But when only idleness, 
bad habits and conduct prejudicial to the common good are 
taxed, it becomes feasible to escape taxation almost entirely. 

The legislative aim should be to levy taxes so that they 
will adjust themselves to the constantly varying capacity of 
individual tax-payers. " Certain and invariable " taxes are 
as absurd as it would be to order a certain and invariable 
size and shape of shoe for all persons. Shoes can readily 
be adapted to feet. But it is often difficult and usually im- 
possible to mould a particular foot to an " invariable" shoe. 

Taxes can be fitted to a man's income. When individuals 



NEED OF GOOD TITLES TO LAND. 



487 



have a fair chance to do so, the tendency is for each man to 
adapt the amount of all his expenses, including taxation, to 
his income. But a government which virtually attempts to 
fit each man's income to his taxes attempts an impossible 
task. 

The extent to which a given burden will encumber an 
individual man, or an individual State, depends largely upon 
its adjustment. A twenty-pound weight strapped to one 
foot would soon prevent a stalwart man from walking 
further. But he could walk all day with twenty pounds 
neatly fitted on his shoulders. In like manner the extent 
to which a given weight of taxation will hinder the progress 
of a State depends on the degree to which it is laid where 
it will least encumber the vital and productive powers of 
such State. And each individual citizen is a better judge 
of the kind and amount of taxes which he can readily bear 
than the State can possibly be. 

LAND TITLES. 

To increase the certainty of titles, the State registers 
conveyances of land. But, as the number of transfers of 
land and the bulk of the volumes in which their registration 
is made constantly increase, the original purpose of a reg- 
istry of land titles is now only partially effected. The 
books of public land ofifices are theoretically open for exam- 
ination by all ; but, practically, they are of service to only 
a few. Transfers are recorded in mass. An index is made 
of the grantors and the grantees ; but no systematic attempt 
is made to trace and index the transfers of a particular 
piece of land, so that any one of ordinary intelligence can 
see at a glance in whom its title rests. 

The result of these facts is that around every public 
land office, wherein a considerable number of convey- 
ances are recorded, one or more private land offices have 
grown. Under our present system (or strictly speaking, 
our want of system), examination of the books of a public 
land office can only be properly made by a person trained 
to the business, and having in his possession notes of much 



488 



SOCIAL STRUGGLES. 



previous labor spent in searching the records. Such per- 
sons furnish what is called an " Abstract, or Certificate of 
Title " to any piece of land required. The fees for perform- 
ing this service steadily increase with the volume of the 
transfers recorded. They have already grown, so large as 
to form a serious obstacle to what is of great importance 
to every community, viz. : the cheap and certain sale and 
purchase of land. 

In the direction it has already taken, the State should 
take another step. It should reform the mode of register- 
ing land titles and take upon itself the entire charge of fur- 
nishing abstracts of title to land. This would at once abol- 
ish private land offices, cheapen the cost of transfers and 
make land titles more clear and certain. Examination of 
the matter shows that in the end no individual can possi- 
bly make an index of land records, relative to a given piece 
of real estate, with the cheapness and certainty that the 
maker, custodian and owner of the entire land records can^ 
to wit, the State. 

PRESERVATION OF LIBERTY. 

In one sense the title to all land is now vested in the 
public. The legal principle of "eminent domain " essen- 
tially rests on the assumption that the paramount right and 
title to all land remains in the State and that therefore the 
State has the right to resume ownership of any portion of 
it which may be needed for public purposes. 

But, after centuries of controversies and bloody struggles, 
all enlightened nations now recognize the principle that it 
is just as wrong for a State to rob an individual as for one 
individual to rob another. Theft is regarded as theft, no mat- 
ter by zvhom committed, nor under what pretense. Conse- 
quently, when a State takes possession of land, the private 
ownership of which is vested in an individual, it is consid- 
ered bound to pay such owner the value of the real estate 
so taken. But, even by such payment, a State has no rec- 
ognized right to take land from one man for the purpose of 
conveying it to another. Resumption of ownership of a 



A TRUE HOME. 



489 



piece of land, by the State, can only be effected when the 
land is needed for public purposes and after making the 
owner due compensation. 

If this were not so, the public burdens would not be 
fairly borne by all citizens ; one man might be robbed of 
the land upon which his life-labor had been spent, while the 
rest of the community would receive benefit without bear- 
ing an equitable share of its cost. The principle of " equal- 
ity of rights and equality of duties " would thus be ignored. 
A plundering despotism would exist, under whose reign no 
property of any kind would be safe from spoliation by gov- 
ernment officials. Whenever we relapse into this mediaeval 
barbarism, the day is at hand when the State will not be 
content with the confiscation of all private property in form 
of real estate. It will then soon stretch out its hand and 
confiscate all the personal property within its borders, in 
the name of Justice and Equality. 

Happily, some fundamental principles, now firmly im- 
planted in the American mind, must be uprooted before 
such an event is possible. The masses of the American 
people are both honest and patriotic. They have sanc- 
tioned rascally legislation ; but always because they were 
misled and did not fully understand the issue before them. 

Moreover, the ideal of a home in this country is a house 
on a piece of land the complete title to which is vested in 
the residents thereon. The belief is ingrained that a man 
who practises the industry and self-denial requisite to 
create an abiding place for himself and family should 
have liberty to own such place and not be a mere tenant 
at the will and pleasure of another. A State landlord would 
be more odious than an individual one. At present there 
is a means of escape from paying rent ; but if the State 
were the universal landlord, one of the dearest forms of lib- 
erty, the right to full and undisturbed ownership of a home, 
would be denied to all. 

Long may facility of obtaining complete title to a home 
remain the proudest boast of this country ! 



CHAPTER XXI. 

How shall we Create a Stable Currency ? — Stability of Value possible 
only when Conditions are Stable. — Money is not strictly a Measure 
of Value. — Difference between Money and other Standards. — Some 
Relative Facts. — Effect of Paper Money. — Effect of Hoarding Gold. 
— Why Prices change. — Changes in the Number of Standards. — 
Silver and Gold are governed by the same Natural Law. — Duty of 
Congress. — Importance of the Dollar having a Uniform Value. — 
The Central Question. — Fruit of a False Premise. — Money must be 
Adapted to Public Intelligence. — Financial Measures suggested for 
Consideration and Amendment. — The Proper Inscription. — A Per- 
fect Currency. — Successful Use of Paper Money requires Intelligence. 
— What will Ultimately Occur. 

A fluctuating currency is the perennial fountain from 
which flozvs many evils and zvrongs generally ascribed to 
other causes. 

We have heretofore found that the natural laws which 
create value apply universally, perpetually, and impartially 
to all things given and received in exchange. We have 
also found that all things contain certain inherent, intrinsic, 
qualities peculiar to themselves ; but that value is not a 
quality but the RESULT of a condition in which a thing 
possessing the intrinsic qualities fitted to supply a want is 
so placed as to meet and fill such a want. 

We have found that when a thing possessing the intrin- 
sic qualities fitted to supply a certain want is placed under 
conditions which enable it to meet such a want, a value is 
always created ; and that the uniformity and stability of 
such value depend entirely on the uniformity and stability 
of the conditions which created it. 

We have also found that the value of a dollar, or any 
other monetary unit, depends on the same facts which give 
a value to a bushel of corn. The value of the '* bushel " 
depends on the number of those bushels offered for sale 

490 



STABLE CONDITIONS, STABLE VALUE. 



491 



relative to the need of, and therefore the demand for such 
bushels. The value of the " dollar " depends on the num- 
ber of those dollars offered for sale relative to the need of, 
and therefore the demand for such dollars. When dollars 
are put in circulation it is always effected by selling them ; 
i. e., giving them in exchange for some other thing. Un- 
less they are so sold, they do not enter into circulation and 
therefore do not affect the value of other dollars already in 
circulation any more than " bushels" of corn permanently 
withheld from market affect the market price of corn. The 
desire to have the United States Treasury contain an im- 
mense hoard of gold is the natural child of a wish to depress 
the prices of commodities and the wages of labor, thereby 
raising the value of bonds and kindred evidences of indebt- 
edness. 

STABILITY OF VALUE POSSIBLE ONLY WHEN CONDITIONS 

ARE STABLE. 

The aforesaid considerations force us to conclude that if 
we wish a " dollar " to have a uniform and stable value, we 
must frame conditions under which the number of those 
dollars offered for sale, i. e., put in daily constant circula- 
tion, will have a uniform relation to the need of such dol- 
lars to carry on the varied exchanges of society. The num- 
ber of dollars in circulation must not be subjected to either 
an increase or a diminution relative to the demand for such 
dollars. Their relative niimber should always be the same, 
no matter what changes occur in their absolute number. 
. To more fully show that uniformity in the relative num- 
bers of dollars is absolutely requisite to insure and produce 
uniformity in the value of each one of those dollars, let us 
illustrate this topic again in a manner different from that 
heretofore employed. 

MONEY IS NOT STRICTLY A MEASURE OF VALUE. 

In order to understand this subject, we must observe the 
wide difference which exists between what is commonly 
called the " measure of value " and other kinds of measures. 



^02 SOCIAL STRUGGLES. 

The United States have arbitrarily adopted a piece of 
metal, of a certain weight, as the unit to be used in determin- 
ing weights. This is kept in the Government buildings 
and is known as the standard pound weight and duplicates 
of it are made when required. The weight of this standard 
pound is not in the slightest extent affected by the number 
of other " pound " standards which may be made in exact 
resemblance to it. 

This country has always, as at present, had several coins 
called " measures of value." But for convenience and 
brevity we shall select one, and that the coin which is com- 
monly supposed to have the most invariable value ; viz., 
the gold dollar. Our law makers have enacted that a gold 
dollar shall contain 23 22-100 grains of pure gold and shall 
be the unit of value. Substantially, every one of these 
dollars is precisely like every other one of these so-called 
" measures of value." That is, they are composed of the 
same materials, have the same weight and the same size 
and shape. An agreement to pay or receive at a future 
time, no matter how distant, a certain number of gold dol- 
lars of the present standard of weight and fineness, is con- 
sequently an agreement to pay or receive a certain number 
of things each one of which possesses certain intrinsic and 
invariable qualities. 

From the aforesaid undoubted fact has been assumed an- 
other statement which has no truthful foundation ; to wit, 
that because the size, weight and constituent materials of 
these gold dollars are substantially " invariable," that there- 
fore their vahte is also invariable.* If this were true, it 
would then inevitably follow that dollars made of lead, so 
long as they were always of the same shape and weight, 
would also have an '' invariable " value. It is true that the 
weight and size of these lead dollars would be substantially 

* Curiously enough many of those who assert that " legislation can 
have no effect on value " unhesitatingly accept the absurd notion that 
because the State stamps a piece of metal " one dollar," therefore the 
value of that dollar is fixed by such an act, without any reference to other 
facts and conditions. 



THE ACTUAL FACT. 



493 



■" invariable " ; but the value of a thing is not identical 
■either with its weight, its size, or the materials of which it 
is composed. If it were, identical things ivonld always pos- 
sess identical value. For instance, a bushel of corn at one 
time and place has the same weight and other qualities 
which it has at another time and place. But the identical 
bushel of corn has one value in Iowa and another value in 
Connecticut ; thus showing that identity of intrinsic qual- 
ities, size and weight, do not prove an identity of value. 
The opponents of the silver dollar are constantly saying 
that its value has " depreciated " since 1873. But the sil- 
ver dollar of to-day is composed of the same materials, has 
the same weight and size, and, in fact, is precisely the same 
" invariable " dollar that it was prior to 1873. Its identity is 
unchanged. In 1859 ^^^ silver dollar of 412^ grs. was 
worth 5 22-100 per cent, more than the gold dollar of 
25 8-10 grs. At present the bullion value of the gold 
dollar is worth about 20 per cent, more than the bullion 
value of the silver dollar. While this change of about 25 
per cent, in the relative value of the gold dollar and the 
silver dollar has occurred, not the slightest change has taken 
place in the relative size, weight, color, and other intrinsic, 
inherent qualities of these two different dollars. 

The aforesaid plain fact is inexplicable and bewilder 
ing, so long as we embrace the false theory that value is 
an " intrinsic " quality of gold and silver. If silver had 
an " intrinsic " value, circumstances could not affect its 
value any more than circumstances can change its color. 
If every nation in the world should simultaneously 
enact that silver should henceforth be yellow, it would not 
have the least effect on the color of silver. Neither could 
any number of laws have the faintest tendency to make 
gold less malleable, lighter, or possessed of any intrinsic 
qualities different from those which are now, and always 
have been peculiar to that metal. The change which has 
occurred since silver was demonetized by Germany in 1872, 
in the relative value of gold and silver dollars is easily un- 
derstood when we remember that value is never an intrinsic 



494 



SOCIAL STRUGGLES. 



quality of anything ; and that therefore identical things, 
possessed of identical, intrinsic qualities, may possess widely 
different values at different times and under the influence 
of different laws, conditions, and circumstances. 

DIFFERENCE BETWEEN MONEY AND OTHER STANDARDS. 

The difference between our standard of weight and our 
so-called standard of value is therefore essentially this, viz.: 
The numbers of the standard of weight have no effect 
whatever upon the weight of that standard. But the num- 
bers of the standard of value are the determining fact which 
regulates the value of this supposed standard of value. 

An increase in the number of gold dollars in use dimin- 
ishes the value of each one of them. A decrease of the 
number of gold dollars in circulation increases the value of 
each one of those in use. Therefore the gold dollar is a 
standard, the value of which is dependent on the number 
of those standards in use. It is a condition similar to 
what would exist if the length of a yard-stick were depen- 
dent on the number of yard-sticks in use. It follows that 
the accuracy of what is commonly called a " measure of 
value" does not depend on the fact that it is always com- 
posed of the same thing, but on the number of those things 
in use. 

The value of one of these standards is affected by any- 
thing which changes the relative amount of gold in human 
possession ; such as the vicissitudes of mining, the amount 
of gold consumed in the arts, and the arbitrary demand 
which may be created for that metal by legislation. But 
this is by far the lesser portion of the total sum of influ- 
ences which operate to raise or lower the value of each and 
every ounce of gold bullion in existence. The value of 
such bullion, and consequently the value of each ''dollar" 
made from it, is affected just as directly by an increased 
or a diminished use of silver dollars, or paper dollars, as by 
an increased or a diminished supply of gold bullion. 

The value of the gold "dollar" therefore rests upon 
an entirely different foundation from the weight of the 



WHY GOLD CHANGES IN VALUE. 



495 



"pound," the size of the "gallon" or the length of the 
" foot," // is an invariable thing, with a variable value. 
As its value depends upon its numbers, the only way to 
endow it with a fixed value would be to create a uniformity 
in its numbers. But the enormous changes constantly 
occurring in its relative supply and demand render such a 
thing impossible. The prime difficulty consists in the fact 
that we cannot control the amount of gold bullion in the 
world and therefore cannot control the number of dollars 
which shall be made therefrom. 

If it were feasible to keep a uniform number of gold dol- 
lars in circulation, the value of each one of those " stand- 
ards " would still be swayed by an increased or diminished 
use of silver as money, and still more by an increased or 
diminished employment of paper money. No fact is bet- 
ter established than that the value of gold throughout the 
world is raised just as quickly by a disuse of silver as 
money as by a diminution of the amount of gold itself. 
Since 1872, a gigantic experiment has been made by sev- 
eral nations which has demonstrated this point beyond a 
doubt. Moreover, it is perfectly certain that an increase 
or a diminution in the total amount of paper money in use 
throughout the world has the same tendency to lower or 
raise the value of money made of gold and silver as an 
increased or a diminished supply of those metals. When 
we remember the vast amount of paper money in circula- 
tion and the changes occurring in its volume, the potency 
of this cause to raise or lower the value of metallic money 
is apparent. 

SOME RELATIVE FACTS. 

The aforesaid facts must always remain, because all 
things are relative, and a diminished or an increased use 
of one of two things which are both used for a similar pur- 
pose must inevitably create an increased or a diminished 
demand for the other. If cotton could no longer be used 
as a material for clothing, the demand for wool would be 
immediately increased. If bituminous coal were to cease 



496 



SOCIAL STRUGGLES. 



to burn, an increased demand would arise for anthracite 
coal. The increased supply of petroleum has diminished 
the value of other illuminating oils. A cheapening of steel 
rails has induced some railroads to discard iron rails and 
replace them with steel ones. Numerous other illustra- 
tions could be cited to show the familiar fact that the 
amount of a given thing may be but^ little changed while 
its value is either raised or lowered by a diminished or an 
increased use of another thing which performs a similar 
function or service. 

EFFECT OF PAPER MONEY. 

Every additional means of dispensing with the use of 
gold has the same tendency to depress its value and keep 
it from rising as an actual increase in the amount of gold 
would have. This is so for the same reason that every ad- 
ditional means of dispensing _with the use of mahogany 
lumber has the same effect on its value that an actual in- 
crease in the amount of such lumber would have. When 
the volume of paper money throughout the world is in- 
creased, the effect on prices is the same as if new gold 
mines had been discovered and an additional amount of 
gold bullion put on the market. That is, the addition of 
a considerable amount of paper money to the circulation, 
no matter what form that paper money assumes, lowers the 
relative demand for gold and thus lowers its value. When 
free commerce exists between nations, a large increase in 
the volume of paper money in one country has an inevita- 
ble tendency to lower the value of gold in another and dis- 
tant country. If England were forced into a desperate war 
she would be again forced to do as she and other nations 
have generally done under similar circumstances, viz., sus- 
pend specie payments and issue an additional amount of 
paper money. This procedure, by liberating the gold now 
used in England, would tend to lower its value in the 
United States. In other words, prices in this country 
would tend upward. More gold would be offered for sale, 
■ — part of the stock of England would be thrown on the 



EFFECT OF LOCKING UF GOODS. ^gy 

market and consequently each ounce would bring a lower 
price. 

EFFECT OF HOARDING GOLD. 

Gold had a lower value in the United States in 1870 than 
it had in 1878. Hoarding gold for the purpose of " resump- 
tion " diminished the total amount of that metal in open mar- 
ket for sale. This hoarding was done not only by the gov- 
ernment but by banks and private individuals. Hence while 
the premium on gold, compared with greenbacks, was thir- 
teen per cent, in October, 1870, and nothing in October, 
1878, the actual value of gold during that time rose. This 
is unanswerably shown by the fact that the average scale of 
the prices of commodities and labor steadily fell to such an 
extent that more labor and commodities were required to 
buy a given number of ounces of gold in 1878 than in 1870. 
And yet, so deluded are the majority with the idea that the 
so-called " par value " of gold is a fixed one, that it was 
generally imagined that the " resumption process " had 
cheapened gold. 

In fact, great numbers of newspapers proclaimed that 
" the Republican party, by its wise policy, had so cheap- 
ened gold that it had been placed within the reach of every 
laboring man." The simple fact is that more labor was 
required to buy 25 8-10 grs. of gold in 1878 than in 1870. 
Wages were lower in 1878 than in 1870. This was the log- 
ical result of taking a considerable portion of the world's 
stock of gold and locking it up. There was less left in 
open market to be taken by its owners to the mint and be 
converted into the so-called standard of value, and then 
offered for sale. A similar result would be produced if a 
considerable amount of the world's stock of any other com- 
modity were locked up. Until the equilibrium can be 
restored by production, the value of a commodity, when 
a considerable portion of it is withdrawn from market, is in- 
creased. In case of gold, the exhaustion of the gold mines 
renders the effect of locking it up far greater than the effect 
of locking up a commodity, like wheat, which can be pro- 



498 SOCIAL STRUGGLES. 

duced in a year. To a considerable extent, every million 
of gold locked up is practically destroyed, so far as the im- 
mediate scale of prices is concerned.* 

Prices are merely a mode of stating the average judg- 
ment of mankind in regard to the value of the money in 
which those prices are paid. Fluctuations in prices are 
therefore a practical reflection of the fluctuations in the 
value of the so-called standard of value, no matter what 
that standard may be composed of. 

WHY PRICES CHANGE. 

The foregoing considerations explain why the commercial 
world is subject to such great and frequent changes in the 
prices of commodities : — fluctuations which are evidently 
not dependent on an increased or diminished supply of 
those commodities. The size of "bushels " and the weight 
of " pounds " do not change, because we have adopted in- 
variable standards for measure and weight. But our stand- 
ard of value is an elastic one; it diminishes in value when 
the number of those standards increase, and it increases in 
value when the number of those standards diminish. The 
unfailing mirror of these changes in this pretended " stand- 
ard " is the average scale of market prices. When flour 
rose to $400.00 per barrel in Confederate money, it simply 
denoted that the number of standard dollars in the Confed- 
eracy had increased. When wheat is sold in New York for 
ninety cents a bushel, and all other things at correspond- 
ingly low prices, it shows that the number of " standards " 
has diminished. The notorious instability of prices and the 
great losses to which persons are thereby made liable who 
are obliged to sell their goods before a certain time, has 
given rise to the proverb : " Out of debt, out of danger." 

* The following statement, made September 11, 1886, shows what a 
large amount of money was then locked up in New York City alone. 

Reserve in banks, $73,159,400 in specie and $20,901,800 in greenbacks ; 
a total of $94,061,200. 

Treasury statement : $157,246,358 in gold, $36,106,591 in greenbacks 
and $95,567,217 in silver. Total in banks and Treasury, $382,981,366. 



FLUCTUATIONS OF PRICES. 



499 



The instability of prices has been more or less observed 
by every intelligent business man. But the fact that these 
fluctuations are largely caused by changes in the value of 
what is called the '' standard of value," has attracted com- 
paratively little attention. If it had, this nation would not 
have tolerated a monetary chaos, a condition in which the 
value of all property compared with money is subject to 
constant and excessive changes. 

CHANGES IN THE NUMBER OF STANDARDS. 

Mr. Alexander Del Mar, in his interesting and valuable 
book, "The Science of Money," furnishes a table which 
shows that the number of "units of value," to wit, " dol- 
lars " in circulation in this country, in proportion to the 
number of inhabitants, has been subject to great variations. 
Among other things, it appears from the figures of this 
careful statistician, that the amount of money in circulatiori 
in this country in proportion to the population, has varied 
from $4.60 per head in 1803, to $13.40 per head in 1839; 
from $6.90 per head in 1843, to $1 i.io per head in 1848, and 
to $28.50 per head in 1864. Furthermore it appears that 
there has been a direct relation between the rise and fall of 
prices which have marked different periods, and an in- 
crease or a diminution of the amount of money in circula- 
tion at those periods. 

That its wealth and commerce are as important factors 
in determining the amount of money needed by a nation, 
as its population, no intelligent person will deny. But Mr. 
Del Mar's figures show great differences in the amount of 
money per head, at times so close to each other as to pre- 
clude all probability of any material change having mean- 
while occurred in the national wealth and commerce. 

There is another very important thing not expressed by 
the said table, and which it is difficult to state accurately. 
That is the well-known fact that, whenever the public 
become alarmed and fear a sudden and intense demand for 
legal tender, a large amount of money is at once hoarded 
and the trouble thereby aggravated. For the time being, 



500 



SOCIAL STRUGGLES. 



such a proceeding practically diminishes the number of 
dollars in circulation, nearly as effectually as if they were 
destroyed. The frightful sacrifices sometimes incurred by 
debtors forced to sell their property in such times of con- 
traction give emphatic confirmation to the statement that 
the numbers of our so-called " standard of value " are in 
reality the determining condition which regulates their 
actual value. And as heretofore pointed out, the use of a 
currency of which only a portion is a full legal-tender 
money enormously increases the contraction resulting from 
a panic. In such times, business men do not want fair 
weather currency ; they want legal-tender money with 
which debts can be paid either with or without the cred- 
itor's consent. 

SILVER AND GOLD ARE GOVERNED BY THE SAME NATURAL 

LAW. 

That the value of the silver dollar depends on its ntimhers 
and not on its intrinsic qualities is just as true as that the 
value of the gold dollar is thus determined Many persons 
imagine the silver dollar was an invariable standard of value 
up to 1873. This mistake arises chiefly from the fact that, 
until silver was demonetized, the value of the silver dollar, 
in effect, was usually measured by comparing it with the 
bullion contained in a silver dollar; which, in reality, under 
free coinage is simply a comparison of one silver dollar with 
another silver dollar, a mode of comparison heretofore 
shown fallacious. The silver dollar, for reasons heretofore 
stated, is less variable in value than the gold dollar. But 
the essential cause of this superior stability is not due to an 
intrinsic value in the silver dollar, but to the greater proba- 
bility of the number of such dollars being uniform. It fol- 
lows that any condition which renders the number of silver 
dollars more unstable must necessarily render the value of 
each one of those dollars more unstable. And it also 
follows that changes in the amount of paper money must 
always affect the value of silver dollars in a manner similar 
to the way that the value of the gold dollar is thus affected. 



WISDOM OF THE CONSTITUTION: 



DUTY OF CONGRESS. 



501 



The United States Constitution provides that " Congress 
shall have power to coin money and regulate the value 
thereof." Heretofore, Congress has coined money but it 
has neglected its power and duty to " regulate the value 
thereof." This omission is almost entirely due to the 
ignorance of monetary principles which has prevailed 
among our " statesmen." They have been mostly oblivious 
of the simple fact that to " regulate the value thereof " 
means that the number of dollars in circulation should be 
regulated, as there are no other possible means whereby 
Congress can control the value of one of the national 
dollars. 

IMPORTANCE OF THE DOLLAR HAVING A UNIFORM VALUE. 

The word "dollars," in this country, is the term applied 
to that form of capital through the help and intervention 
of which one form of capital associates with all other forms 
of capital, one kind of labor associates with all other kinds 
of labor, and all forms of capital hold commercial inter- 
course and association with all kinds of labor. Labor may 
be compared to one pulley, capital to another pulley, and 
''dollars" to the belt which connects those pulleys to- 
gether. Consequently, any material change in the value of 
each one of those dollars has an inevitable tendency to de- 
range the industrial machinery whose motion depends on 
the uniformity of their value. Combinations of laborers 
may temporarily keep wages from falling ; but, if the cur- 
rency be steadily contracted, wages must, sooner or later, 
be reduced to correspond with the diminution of currency, 
just as certainly as wages increase when the currency is 
expanded. 

Of all things produced in this wide land, labor is the 
most perishable. It must be profitably employed every 
day or it goes to waste without benefiting any one. Every 
idle day spent by a man whose health and strength fit him 
for labor is a waste of national wealth to the extent that 



502 SOCIAL STRUGGLES. 

his labor might have created it. A million idle men, each 
of whom might, if employed, daily create a dollar's worth of 
wealth, are a clear loss of a million dollars every day they 
remain idle. 

It follows from the foregoing premises, that nothing is 
more expensive, nothing is more wasteful, than for a na- 
tion to neglect measures which will tend to keep the belt 
which connects labor and capital of a uniform length and 
efificiency. And our analysis of the matter shows this can 
only be done by maintaining the greatest attainable uni- 
formity in the number of dollars in circulation, relative to 
the commercial and industrial need of those dollars. If the 
total number of dollars always bore a uniform relation to 
the demand for them, there would never be any fluctuation 
in the value of one of those dollars. If "dollars" were 
always of the same value, there would be no changes in the 
general scale of the prices of commodities and labor. In- 
dividual articles, in consequence of greater scarcity or abun- 
dance, would fluctuate in value to some extent. Invention 
and machinery would then, as now, lower the prices of some 
things. But the average rate of prices would remain uni- 
form. As the prices of commodities would be more nearly 
uniform than at present, the rate of wages would also be- 
come more stable, and the industrial strifes now constantly 
occurring between employers and laborers would be less in- 
tense. Real estate would also be far more stable in value 
than at present. The growth of population and wealth 
would cause a steady rise in the value of some lands ; but 
the fluctuations which now characterize the real estate mar- 
ket would mostly disappear. The amount of business trans- 
acted by what are now essentially gambling institutions, 
called "stock exchanges," would be reduced to a small 
fraction of its present volume. All the above statements 
are evident when we bear in mind that the average market 
quotations are the invariable reflection of the value of each 
one of the dollars in which those quoted prices are stated. 
The same cause must always produce the same result. 



WHA T WILL BE SEEN. 



503 



THE CENTRAL QUESTION. 

The considerations aforesaid lead us to conclude that the 
central question which must eventually engross the national 
attention is not : Of what materials shall we make our dol- 
lars ? The great problem will be seen to be : VVJiat number 
of dollars shall constitute our currency; and Jiozv shall this 
mimber be increased or diminished so that its relation to our 
population, wealtJi and commerce will remain uniform ? 

Hitherto, the real question before us has attracted com- 
paratively little attention. If it had the present chaotic 
condition of our finances would not exist. We have 
created so-called " standards of value " and then left the 
essential thing, to wit, the number of those standards, to 
chance ; to the precarious and fluctuating supply of gold 
and silver by reason of changes in the amount of those 
metals produced from the mines, changes in the amount 
consumed in the arts, and changes in the demand for them 
by reason of the action of foreign governments and people. 
We have allowed the most important factor in social and 
commercial progress, to wit, our money, our means of stat- 
ing the equities between millions, to be helplessly subject 
to the caprice of uninstructed legislators and the intrigues 
and schemes of classes selfishly interested in changing the 
value of each one of our " standards " so cunningly and 
silently that the process, except by a few, would be unob- 
served until accomplished. 

FRUIT OF A FALSE PREMISE, 

This colossal blunder is almost entirely traceable to the 
false fundamental premise that gold and silver contain an 
intrinsic value, and that consequently, each standard coin, 
under all circumstances, is an invariable measure of value. 
The fact that a large number of persons have recently 
changed a belief in the fixed intrinsic value of both gold 
and silver to a belief in the fixed intrinsic value of gold 
alone, intensifies the practical effect of this blunder without 
substantially changing its origin and nature. 



504 



SOCIAL STRUGGLES. 



Regulation of the number of our standards of value is the 
essential feature of our monetary problem. The materials 
of which we shall make " dollars " will depend upon the 
popular intelligence in regard to finance ; upon habit, prej- 
udice and sentiment, and upon future discoveries and in- 
ventions. The task before us is clear, but its magnitude is 
so great that no one man or body of men can at once con- 
clude it. Its final solution will be reached whenever the 
attention of a large number of intelligent minds is concen- 
trated upon it for a considerable time. 

MONEY MUST BE ADAPTED TO PUBLIC INTELLIGENCE. 

Money is both an evidence and a form of human prog- 
ress and development. Consequently, a particular financial 
system cannot be arbitrarily created and put in successful 
operation ; — it must be a natural outgrowth of the society 
whose commerce it is intended for. The practical question 
then is not : What is the most perfect financial system ? 
but it is : What monetary system is best adapted to our 
present stage of national, commercial, and intellectual de- 
velopment ? 

Human nature in all generations is the same. Therefore, 
it is inevitable that all propositions to reform our money 
will be bitterly opposed, for reasons similar to those which 
^have always engendered resistance to all forms of progress. 
A large amount of legislation in force in England and other 
European countries, which full experience has shown to be 
salutary, was enacted in contempt of the opinions and ad- 
vice of the so-called "political economists." 

When Robert Stephenson was engaged in his long weary 
struggle to improve facilities for transportation, his chief 
opponents were men who professed to know all about the 
subject. No class denounced railroads as impracticable 
and unscientific with so much confidence and vehemence 
as the men who called themselves '' scientific engineers." 

History will certainly repeat itself. We may safely pre- 
dict that monetary reform will be most zealously opposed 



NEED OF CONFERRING WITH EACH OTHER. 



505 






by those who profess a " scientific " knowledge of the sub- 
ject. Their pride and self-interest will instinctively lead 
them to discredit ideas which, if generally believed, would 
practically result in damaging their reputation for learning 
and acumen. By the average man, no task is more reluc- 
tantly performed than to admit his opinions erroneous. 
Especially is this so when he has pretended to be an au- 
thority and has in reality taught falsehood. 

FINANCIAL MEASURES SUGGESTED FOR CONSIDERATION 
AND AMENDMENT. 

Whoever states his opinion in regard to the financial 
policy of this nation necessarily subjects himself to the im- 
putation of being presumptuous. As the opinion of a sin- 
gle individual on a subject of such importance is of little 
weight, a criticism of that kind, in one sense, is a just one. 
But if this consideration deterred every one from express- 
ing his views, there would be no opportunity for a compar- 
ison of ideas and the mutual instruction resulting therefrom. 
Therefore, more fully than heretofore, some financial meas- 
ures are presented for consideration. 

First. Withdraw from circulation all the national bank- 
notes and all the existing greenbacks. This withdrawal 
would necessarily require considerable time for its accom- 
plishm,ent. 

Second. Issue a new form of greenbacks to the extent 
of fifteen dollars per head of the population of the United 
States, and so regulate the amount of those greenbacks as 
to always keep, as closely as practicable, that amount and 
ratio of absolute paper money relative to the population, 
in circulation, and no more. These greenbacks, in order to 
avoid either a contraction or an inflation of the total 
volume of paper money, to be issued simultaneously with 
the cancelation of the present greenbacks and bank-notes. 
The greenbacks used to replace canceled bank-notes could 
be put in circulation by buying United States interest-bear- 
ing bonds in open market and then destroying the bonds. 



5o6 SOCIAL STRUGGLES. 

THE PROPER INSCRIPTION. 

A one dollar greenback of this new issue to bear an 
inscription similar to that on all other denominations ; to 
wit, "UNITED STATES OF AMERICA, ONE DOL- 
LAR. This is a legal tender at its face value for all debts 
and dues both public and private, except in case of specific 
contracts entered into before the passage of an Act of Con- 
gress, approved authorizing the issue of this dol- 
lar." 

It may be asked : What foundation would the value of 
such paper dollars rest upon ? The answer is obvious ; viz., 
upon the desire of mankind to possess a medium of ex- 
change ; upon the need of money. 

It furthermore may be asked : Is not a human desire and 
need a slender foundation upon which to rest a national 
currency? To this question a moment's reflection furnishes 
a complete reply. Said foundation is precisely the one 
upon which all values rest. The value of wool depends on 
human desire for cloth, — upon the need of woolen cloth- 
ing. The value of houses rests on human desire for a com- 
fortable abode, upon the need of a shelter from the inclem- 
ency of the weather. All values of every kind and nature 
have no foundation and basis whatsoever but human 
desire and human need. 

After the aforesaid change was accomplished we should 
have comparatively but little more paper money than we 
now have ; but, in several important respects, it vv^ould be 
superior to that now in circulation. It would all be a legal 
tender for all purposes, with the unimportant exception of 
previously contracted debts by their terms payable in coin. 
Lapse of time would soon render this exception unneces- 
sary. To a large extent our present paper -money is fair 
weather money. The national bank-notes pass current for 
payment of all private debts so long as business moves 
along smoothly. But the moment apprehension fills the 
minds of men owing debts which a failure to pay, at a spe- 
cified time, will involve them in a loss of credit and possible 



NEED OF REMOVING TEMPTATION. 



507 



bankruptcy, such non legal-tender currency is " like a broken 
tooth and a foot out of joint." It is a false friend. Even 
the greenbacks, under our present laws, would cease to be 
a legal tender at the custom house, if specie payments were 
suspended. Business men would have far greater security 
than they now have, if the money they handled were all a 
legal tender. No danger would then exist of being caught 
with a note to be paid and nominally enough money to 
pay it with, and then have part of the money rejected 
because not a full legal tender. 

The amount of paper money in circulation would be far 
more uniform than at present. We now regulate the 
amount of bank-notes by the so-called "redemption" proc- 
ess. National bankers, as a class, have been continually 
inveighing against the greenbacks ; but whenever an in- 
creased demand exists for legal-tender money, they at once 
hoard greenbacks and contract the amount of bank-notes. 
They do this to place themselves in better position to 
*' redeem " bank-notes in greenbacks. Their conduct is 
guided by self-interest, without the slightest regard to the 
best interests of the community from whom they derive 
their profits. Temptation to act in this manner would be 
removed by taking away from the national banks the privi- 
lege of issuing paper money. 

The expensive machinery of redemption of bank-notes, 
collection of taxes on circulation, examination of amount 
of greenbacks held by the banks, etc., could all be dis- 
pensed with by a direct issue from the Treasury of all paper 
money. This would lessen the number of ofifice-holders. 

A nation which attempts to regulate the amount of its 
paper money by what is called "specie payments" must 
subject itself to the great expense of keeping constantly in 
the Treasury vaults a large amount of idle coin. No one 
pretends that the United States can safely carry on the 
specie payment system with less than one hundred millions 
of idle coin. In fact we have now about two hundred and 
fifty millions thus lying idle. At the low rate of three per 



5o8 SOCIAL STRUGGLES. 

cent, per annum, the interest of these large sums is a heavy- 
national burden. 

If we regulated the amount of our paper money without 
recourse to the " redemption " method, we should rid our- 
selves of the danger now constantly present, that war, or 
severe financial disturbance in foreign nations, will drain 
away a sufficient amount of coin to cause an involuntary 
suspension of specie payments with its attendant industrial 
and commercial derangement. 

It would also be a great advantage to the nation to be 
rid of a class of men whose selfish interests prompt them 
to continually plot against the welfare of the industrial 
classes. When the unjust privilege of issuing money is 
taken from the banks, one such class will disappear. 

Third. Restore the coinage of silver to its ancient and 
rightful position. Make the coinage of the silver dollar 
unlimited with no charge for coinage beyond the attendant 
expense. Those who fear a " flood of silver dollars " should 
ask themselves : Where is the silver bullion to come from 
wherewith to coin the "flood"? By no possibility could 
silver dollars be worth less than the bullion from which 
they are coined. To-day (Nov., 1885), the bullion in a sil- 
ver dollar has a higher value than the gold dollar had in 
1873. Thus if the "flood " came it would have the effect 
which a flood of gold dollars would have had in 1873. The 
absurdity of talking about the wrongs which creditors would 
suffer if paid in silver dollars worth more than the gold dol- 
lar was in 1873, is apparent. 

Fourth. Discontinue the coinage of the silver half dol- 
lar and coin those existing into standard silver dollars. 
Instead, issue paper money of the denomination of half 
dollars to such amount as the people wish to pay for in 
dollars. Such fractional money to be exchangeable, at the 
pleasure of its holders, for any other kind of national 
money and to be a legal tender for all purposes to the 
extent of ten dollars. 

Fifth. Issue coin certificates, payable on demand, at the 
option of the Government, in either gold or silver, to any 



WHAT IS NECESSARY. 



509 



one who chooses to deposit either silver or gold dollars in 
the United States Treasury. Said certificates to be limited 
only by the number of dollars thus deposited ; and to be 
of denominations of two, five, ten, twenty-five, one hun- 
dred and one thousand dollars. 

A PERFECT CURRENCY. 

The reader may ask : Would a compliance with the 
aforesaid suggestions create a currency of a perfectly uni- 
form value? I answer. No. In order to make dollars of 
uniform value, the Government must make, not a part, but 
all of them from a material over which it has complete con- 
trol. It must have intelligence enough to maintain a uni- 
form relation between the number of those dollars and the 
amount of exchanges effected therewith. It must have 
integrity and watchfulness over the welfare of all sufficient 
to resist class importunities and appeals for either an 
increase, or a diminution of the relative number of dollars 
in circulation ; and it must have stability and power 
enough to prevent counterfeiting and to enforce its decrees 
in all respects. 

Why then make the foregoing suggestions ? Because 
they would create a currency of far more uniform value 
than the one we now have, and, in all probability, as stable 
a currency as the American people are now qualified to or- 
dain and maintain. At present the total number of dollars 
in circulation fluctuates from two causes ; to wit, alterations 
in the number of paper dollars, and changes in the number 
of metallic dollars. And our financial history shows that 
greater changes have occurred in the number of paper 
dollars than in the number of metallic dollars. Under a 
system similar to that above outlined, the number of paper 
dollars would be substantially a fixed one. It would not 
always bear the same relation to the commerce of the 
country, but it would to the population, and this would 
give it a far more invariable quality than has ever been pos- 
sessed by any paper money in the United States. 

The changes in the total number of our dollars, instead 



H jQ SOCIAL STRUGGLES. 

of arising from TWO sources as at present, would then arise 
from only ONE cause ; to wit, alterations in the number of 
metallic dollars. Financial disturbances in foreign nations, 
then, as now, could change the number of our metallic dol- 
lars. But, unlike the present, such events would not have 
the slightest effect on the number of our paper dollars, 
which would form the major portion of the total number of 
dollars. 

SUCCESSFUL USE OF PAPER MONEY REQUIRES INTELLI- 
GENCE. 

Philosophic and profound writers on Finance have stated 
that the use of gold and silver as money is a relic of bar- 
barism which will eventually disappear. This is undoubt- 
edly true. But, instead of being a conclusive reason 
against our further employment of those metals, as money, 
it is an unanswerable argument in favor of their use at pres- 
ent. For, in fact, we have not yet emerged from barbar- 
ism ; we are merely emerging from that state. We have 
only partially rid ourselves of barbaric customs, laws, and 
ideas. What will the historians of the thirtieth century say 
of a people among whom the possession of wealth, no mat- 
ter how obtained, insured distinguished social considera- 
tion and was a sufificient qualification to enable an ignorant 
man to become governor of a State, a United States sena- 
tor, or obtain other high official positions? 

A great moralist has said that " national amusements are 
an unerring index of national civilization." Judged by this 
criterion, we are but little removed from the ignorance and 
brutality of ancient nations whose highest pleasure was found 
in witnessing savage and bloody combats between man and 
man and between men and wild beasts. Our newspapers 
print what is known will please a large portion of their 
readers. They daily contain accounts of disgusting prize 
fights between brutes in human form, and of revolting 
struggles between dogs more refined than those who urge 
them to mutilate and kill each other. The percentage of 
our population which does not take pleasure in the " sport " 



THE FUTURE MONEY. 5 I i 

of maiming and murdering inoffensive and defenseless birds 
and animals is deplorably small. 

A few years ago a man, clearly and palpably insane, 
wounded the President of the United States. After a con- 
siderable time, his death ensued. The correctness of the 
President's medical treatment was questioned by some of 
the most distinguished practitioners in the world. Not- 
withstanding these facts, the majority of the American peo- 
ple, from one end of the land to another, howled like a 
pack of hungry wolves for the gratification of having a poor 
helpless wretch barbarously put to death. But enough of 
such humiliating facts. Why recite a hundred more ? 

WHAT WILL ULTIMATELY OCCUR. 

Whenever the people of the United States become suf- 
ficiently intelligent to create and maintain a currency com- 
posed entirely of absolute paper money they will relegate 
gold and silver to their final and proper position. Both 
gold and silver will be demonetized. Those metals will 
then occupy precisely the same relation in the business 
and commercial world that are now occupied by iron, tin, 
copper, quicksilver, platinum, zinc and other metals. They 
will be commodities bought and sold by weight and their 
price will be stated, not, as at present, by fractions and pieces 
of themselves, but by the units of an absolute paper money, 
automatically regulated in amount. An increase or a de- 
crease of the amount of those metals in the country might 
then affect the value of a pound of one, or both of them, 
but would have no influence, as at present, upon the value 
of all other commodities in the land. The solvency or 
bankruptcy of large numbers of business men would not 
then, as now, depend on the occurrence of events in some 
part of the world which created an increased or a dimin- 
ished demand for one or two things ; to wit, for silver or 
gold. The absurdity of placing the vast equities constantly 
existing between sixty millions of people, in their manifold 
business and commercial associations, at the mercy and 
upon the hazard of a rise or fall in the value of one or two 



CI2 SOCIAL STRUGGLES. 

commodities would then become apparent. Wonder would 
then arise how such a crude mode of estimating what jus- 
tice required one person should receive from another could 
have been so long in existence. 

A child cannot be made able to walk by placing it in the 
middle of a room and ordering it to do so. Ability to v/alk 
is an attainment made possible only by the infant's gradual 
development, and no arbitrary means can otherwise hasten it. 

The people of the United States are probably now 
enough acquainted with the fundamental facts of finance to 
make a portion of their money on correct principles. 
After that step has been taken, and given the general satis- 
faction which it inevitably would, a popular demand for an 
extension of the system of absolute paper money would 
arise. The first step in the right direction is, therefore, the 
essential one. All others will necessarily follow the prog- 
ress made in acquiring and practically using a knowledge 
of true financial principles. What are now called " ob- 
scure financial problems " will then be dismissed to the 
limbo occupied by many " problems " which puzzled man- 
kind in the year 1300. 



NOTES. 



It has been said that if Congress issued absolute paper money there 
would be nothing to prevent frequent alterations in the value of a dollar 
caused by changes in the amount of such paper money. It is forgotten 
that Congress now fixes the amount of metal in a dollar, and has power 
to change such amount at every session. But power to often change 
the weight, and consequently the number of dollars, has not resulted in 
the frequent exercise of that power. 



At present the sum in greenbacks authorized bylaw is the limit below 
which the amount of paper money in this country cannot fall. The 
method of regulating the volume of paper money heretofore proposed, 
if adopted, would, like the present limitation to the amount of greenbacks, 
act like a rachet wheel. Movement of the amount of money could take 
place in only one way : it would create a line from which the amount 
of paper money could not vary, but would not hinder alterations in the 
total amount of money as a result of an increased or diminished volume' 



WHAT WE SHOULD SEEK. 



513 



of gold and silver coins. The principle which for twenty- five years has 
been applied to the regulation of our money would remain in force, 
modified in practical application by eliminating the National bank notes, 
by increasing the amount of greenbacks and by free coinage of silver. 
The idea of allowing an increase or a diminution of the total amount of 
currency flowing from alterations in the number of gold and silver coins 
would be retained. As an inevitable consequence the average scale of 
prices, then as now, would be influenced by fluctuations in the amount 
of metallic money in circulation. The advantage of the new plan would 
consist in avoiding the great fluctuations in the amount of paper money 
incident to the present system of " specie payments and the use of 
National bank notes." 

But, as before remarked, this is merely a tentative suggestion to elicit 
discussion, proposed simply as a better method than the one we now 
have and as good as we are prepared to adopt. After a majority 
fully understand that the objective point of financial legislation should 
be to maintain stability in the average scale of prices, and that this can only 
be attained by conformity between the amount of money and the amount 
of valuable things exchanged therewith, a radical change will be made 
in our mode of regulating the amount of paper money, and gold and 
silver will be demonetized. 

Heretofore several distinguished monetary students have recognized 
the grave defects of regulating the amount of paper money by what is 
•called "specie payments " and have advocated various other measures. 
But most of such persons have made the fundamental mistake of selecting 
the wrong object of attainment. Instead of seeking to create money 
with a stable value and, consequently, stability of prices, their efforts 
have been directed toward keeping paper money at par with metallic 
money. If successful, such plans would merely cause fluctuations in the 
value of paper money to be synchronous with changes in the value of 
metallic money ; whereas the true object should be to create a paper 
money unaffected by fluctuations in the value of gold and silver. Instead 
of so regulating paper money that its value shall move up and down 
simultaneously with an increase or diminution of the supply of, and de- 
mand for, gold and silver, we should make stability of prices the aim of 
monetary legislation. And, as heretofore pointed out, whenever a dollar 
has a uniform value, the average scale of prices will also be uniform. 

The foregoing statements about the relations of paper money, prices 
and metallic money apply with equal force to the regulation of metallic 
money. Many imagine that maintenance of an equality between the 
value of a silver dollar and a gold dollar is the ultimate end of finance ; 
but the silver and the gold dollar may have an equal value and mean- 
while both dollars be rising or falling in value. Stability in the value of 
the monetary unit is the true end to be sought, no matter of what mate- 
rial that unit is composed. 
33 



514 SOCIAL STRUGGLES. 

It has been suggested that the United States create a Monetary Com- 
mission composed with as much care as is now exercised in choosing 
members of the Supreme Court. This Commission to be guided by 
carefully prepared rules, and clothed with power to issue paper money 
in such amounts that the average scale of prices, tested by the prices 
of 100 of the chief articles of commerce, will remain as stable as is pos- 
sible to make them. 

Various other means of regulating the amount of paper money have 
been proposed. A correct plan can probably not be devised until a large 
number of capable persons shall recognize the feasibility of a better 
method than that in use, and concentrate their thoughts upon it, with the 
aid of debate, for a considerable period of time. 



The subjoined news item, cut from the New York Sun of Dec. 5th, 
1886, illustrates the effect of limitation in amount upon the value of 
money. One dollar will buy the material from which about six hundred 
cents are made. Yet so potent is limitation of the numbers of those 
cents that they are usually worth one dollar per hundred and, when un- 
usually scarce, as in this instance, may be worth still more. 

"the little bronze coin at a premium of five per cent, in new YORK." 

" One-cent coins are now worth 1.05 cent apiece in this city in sums of $10 or more. 
Retail dealers are really inconvenienced by a want of the bronze coins. 

" At the Sub-Treasury it is said that the scarcity of cents just now is due to the fact 
that the mint in Philadelphia has been devoted to coinage of a larger size for some time 
past, and meantime the odd prices which are now prevalent in the up-town stores have 
used up the small change. The shortage is not likely to embarrass the Street, and by the 
end of the holidays it is expected that a copper will no longer be worth more than the 
customary ten mills. Five-cent nickels have been in demand also, though not so rare as 
the cents." 



Many persons want better houses and more comforts for less labor. 
This can be produced only by a greater abundance of capital. Capital 
will increase and fall in price in the ratio that its waste is stopped and 
its creation increased. Bankruptcy of employers and enforced idleness 
of workmen would be greatly diminished by stability of prices. A dollar 
of uniform value would stimulate production and lessen waste. Rent, 
Labor and kindred topics are therefore so intimately related to Money 
that they can be intelligently studied only in connection therewith. 



CHAPTER XXII. 

Ought the United States maintain the Gold, and. the Silver Dollar at an 
Equality of Value ? — Folly of Blindly imitating other Nations. — 
What We have Actually done. — What We should now do. — How 
Foreign Commerce is Conducted. — Foreign Trade is a Barter of one 
Thing for Another. — The Incentive of Trade. — Why Men engage 
in Foreign Commerce. — Use of Bills of Exchange. — How England 
Trades. — What Wealth is. — Would it not be an Advantage to have 
Money similar to the Nations with whom our Trade is chiefly con- 
ducted ? — What effect would Unlimited Coinage of Silver Produce .'' 
— Silver Bullion will Never be Easily Obtained. — The End which 
Laws should Seek. — The Par Value Delusion. — Effect of Limited 
Coinage. — Artificial Value of Coins. — Hard Pan. — Gold Premium. — 
True Test of Value. — How Evils can be Averted. — Social Problems 
will always be before Mankind. — What Inflation can do. — Confed- 
erate Money. — A Cotton Basis for Money. — Why Goods are not 

Sold when active Inflation is Progressing Study of Social Topics, 

— Conclusion. 

" The simple believeth every word : but the prudent man 
looketh well to his going ^ 

We have heretofore found that the ultimate object and 
end of our governmental policy should be to establish jus- 
tice and promote the prosperity and development of the 
American people. To that purpose every means should 
be made subordinate, and we should carefully deliberate 
before believing the statements of classes whose clamors in 
behalf of their own interests burden the air. 

We have also found that stability of the average rate of 
prices is one of the most powerful influences which can be 
devised to secure the aforesaid end. Furthermore, we have 
found that, as the general scale of prices is merely a reflec- 
tion of the value of the currency, stability of prices is pos- 
sible only to the extent that uniformity of value is main- 
tained by the money in which those prices are stated. It 
follows that the answer to the aforesaid question resolves 

515 



5l6 SOCIAL STRUGGLES. 

itself into this : Would such a measure create stability of 
prices ? 

A large number of persons constantly proclaim that if 
we establish unlimited coinage of both gold and silver, that 
instead of the silver and gold dollars being on an equality 
of value, the gold dollar will be at a premium and be dearer 
than at present. They furthermore tell us that such an 
inequality would produce greater fluctuations in prices than 
now exist and be very disastrous to the national prosperity. 
The chief argument in support of their doctrines is that as 
gold has a fixed value and is the standard of coinage in the 
nations with whom the bulk of our foreign commerce is 
conducted ; to wit, with England, France, Holland, and 
Germany, it is necessary for us to have a similar currency on 
an equality of value with those nations. Let us now see if 
the aforesaid statements be correct. 

FOLLY OF BLINDLY IMITATING OTHER NATIONS. 

In the opinion of many intelligent observers, the peace 
of Europe is akin to the peace of a man with a keg of gun- 
powder and a lot of shavings stored in the cellar of his 
house. At any time, a general war or widely spread revo- 
lutionary movements may ^occur. Suppose, as a result of 
such events, the money of European nations should become 
worth only one-half what it now is. If the commerce of 
this country require that our money should conform to 
the European standard, in such case it would logically and 
inevitably follow that we should at once change our cur- 
rency to an equality with that of the nations with whom 
we trade. But the same persons who gravely assure us we 
cannot advantageously trade with Holland unless our mer- 
chants employ the same kind of money in use in that coun- 
try would protest against such a step. On the other hand, 
it would also follow that if European nations adopted meas- 
ures to double the present value of their money, we should 
properly do the same thing with ours and make the term 
" one dollar " mean as much value as the term " two dol- 
lars " now does. 



IMITATION OF EUROPE. 



517 



Adoption of the foregoing principles would be an entire 
abandonment of the idea of maintaining a stable currency 
and stable prices in this country. In its stead, we should 
act on the notion that every fluctuation in the value of 
European money and consequently every change in Euro- 
pean prices should be reproduced in the United States by 
appropriate legislation. 

WHAT WE HAVE ACTUALLY DONE. 

Absurd as the aforesaid proposition is, in fact, it is pre- 
cisely what we have been doing since 1873. European 
nations changed the meaning of the words "pound," 
"franc," "mark," etc., by striking silver out of the statute 
books as a legal tender and denying it free coinage. This 
proceeding has resulted in an appreciation of the value of 
gold to the extent of over 20 per cent. Prices have fallen 
in the same ratio and Europe has suffered all the evils of a 
contracting currency. Money has risen in value while all 
other property has relatively fallen. Instead of seeking to 
maintain uniformity in the value of their money and stabil- 
ity in prices, those nations have steadily legislated to create 
dearer money and cheaper goods and labor. Universal 
distress has thus been produced among the industrial classes 
while the holders of over twenty thousand million dollars' 
worth of national bonds have been correspondingly en- 
riched. Practically the public debts have thus been silently 
increased to the enormous amount of four thousand mill- 
ions of dollars, without including the addition to private 
indebtedness and the increase in the value of railroad 
bonds. 

In 1873, silver was slyly demonetized in the United 
States. The foregoing tables of prices show conclusively 
that the great change which has occurred in the meaning 
of the term "one dollar" would not have taken place if, 
without reference to the conduct of other nations, we had 
steadily adhered to the principle of maintaining a stable 
currency and stable prices in the United States. Instead 
of that, we have been deluded with the notion, industri- 



5l8 SOCIAL STRUGGLES. 

ously disseminated by persons who would make a profit 
from its adoption, that because Europe had so legislated as 
to change the value of money and the scale of prices, there- 
fore, great disasters would befall us if we did not follow in 
her footsteps. Without examination we have believed 
these false cries. The tables aforesaid show that if we had 
not demonetized silver, prices in the United States, since 
1873, would have remained nearly on the level of prices in 
gold at that time. This would have prevented an enor- 
mous amount of wrong and suffering in this country, and 
in consequence of the steadier employment of labor, and 
greater creation of wealth, the United States would be far 
richer than at present. But a few persons would not have 
been as rich as they now are. 

WHAT WE SHOULD NOW DO. 

Shall we now continue to maintain our money at the 
artificial height to which it has been raised by demonetizing 
silver? Or, shall we return to the sound principle that sta- 
bility in the value of United States money should be 
sought for, without the slightest reference to the fluctua- 
tions in the value of the money of foreign nations ? The 
latter course would not derange our foreign commerce in 
the slightest degree. Having money different from that of 
England would have no more effect upon our trade with 
England than if she adopted silver and we retained gold. 
If England doubled the value of a pound sterling, or 
made it one half what it now is, such a proceeding would 
not in the least disable us from trading with England. 

now FOREIGN COMMERCE IS CONDUCTED. 

Commerce between nations is carried on by an exchange 
of commodities. Money is not used in such trade. There is 
no such thing as international money. To a comparatively 
small extent, gold and silver are used to pay balances in 
such transactions but they are used as commodities and not 
as money. If a New York merchant owe a merchant in 
London ten thousand dollars he always sends him directly, 



HOW FOREIGN MERCHANTS TRADE. 



519 



or indirectly, some commodity in payment. This may be 
a certain number of bales of cotton, a certain number of 
bushels of corn, or a certain number of ounces of gold bul- 
lion. Whether payment be made in quicksilver, copper, lead 
or gold, the principle of the transaction is precisely the 
same= Payment is made by a commodity. The price of 
this commodity is computed in the kind of money stated in 
the agreement. But this is only a matter of a little arith- 
metic and does not, of itself, affect the actual cost of the 
commodity to either party. When greenbacks were quoted 
at a discount of 50 per cent., it made no difference to the 
New York merchant, in settling his accounts with a London 
merchant, whether the wheat shipped to Liverpool were 
computed at its price in greenbacks, or its price in gold. 
It was essentially a question of a little computation. If all 
nations in the world adopted the American silver dollar as 
the basis of computing values, the only practical difference 
resulting therefrom would be a little saving of time in com- 
putation. 

From 1797, for upwards of twenty years, England sus- 
pended specie payments. But this made no difference in 
the mode in which her merchants paid for foreign goods. 
It was done with commodities before suspension, and after 
suspension the payment went on as before. When specie 
payments were suspended in this country in 1861, that 
event did not arrest our foreign commerce for a day ; simply 
because foreign payments are made, not in money, but in 
commodities. 

If the merchants of this country could not trade with 
foreign nations unless provided with the same kind of 
money as those nations, our mints would be asked to coin 
the money of every country with whom we hold commerce. 
A person trading with Russia would need " roubles " ; he 
would need " marks " to trade with Germany ; " francs " to 
trade with France, etc., etc. But, in fact, merchants do not 
need anything of the kind. Silver dollars are the Mexican 
money. But it does not therefore follow that in order to 
trade with Mexico merchants must provide themselves with 



520 SOCIAL STRUGGLES. 

silver dollars. The essential thing in foreign trade is that 
something should be sent abroad which foreigners prefer to 
what they already have and which they are ready to give in 
exchange for what has been sent them. 

Foreign commerce is not conducted for amusement. 
Neither is it carried on from benevolent or philanthropic 
motives. Foreign commerce originates, whenever a man 
thinks he can make a profit by buying a commodity in one 
place, changing its value by carrying it to another place, 
and there exchanging it for some commodity the value of 
which can be increased by bringing it, on the return jour- 
ney, to the place from which the first bought commodity 
was taken. The result of this transaction is that he has 
been the middle-man through whose help parties in one 
country have bartered goods with persons in another coun- 
try. 

FOREIGN TRADE IS A BARTER OF ONE THING FOR 

ANOTHER. 

Let us sketch the steps by which farmers in Illinois 
trade with farmers in Brazil and barter wheat for coffee. 
The Illinois farmers sell their wheat for the dollars current 
in the United States. This wheat is taken to a mill and 
after being ground is shipped to New York, in which 
market it is sold, as so many barrels of flour, to a merchant 
who carries on commerce with Brazil. This merchant pays 
for it with the dollars current in the United States. The 
flour is then shipped to Rio Janeiro and there sold for the 
money current in Rio Janeiro. With the proceeds from 
the sale of the flour, a cargo of coffee is bought and paid 
for in the same money received for the flour. 

Or, as is frequently the case, when the ship arrives in the 
harbor of Rio Janeiro, the person in charge of the cargo 
goes to a dealer in coffee and says : " I wish to buy a cargo 
of coffee. How much is coffee worth?" After learning 
that fact, the next question is : " What will you allow me 
per barrel for my flour and give me pay in coffee at so much 
per hundred pounds?" If a bargain be made, the parties 



PROFITS OF MIDDLEMEN. 5 2 1 

thereto compute the value of the flour and coffee and ascer- 
tain how much cofTee shall be given in exchange for the 
flour. The coffee is then brought to New York and sold 
for dollars current in the United States to a wholesale 
dealer in coffee. This dealer sells directly, or indirectly, to 
a retail dealer of coffee in Illinois. He sells it to the same 
farmers who sold the wheat, (the flour from which was 
traded for the coffee,) and takes his pay in the same dollars 
paid for the wheat. In Brazil the flour is passed from hand 
to hand until it reaches the farmers who consume it and 
pay for it with coffee. 

The barter has then been completed. The farmers of Illi- 
nois have exchanged their grain with the farmers of Brazil. 
The result is similar to what would have occurred if a 
farmer in Illinois could have walked across the road to a 
telephone office and said to a farmer in Brazil : " How 
much coffee will you give me for a bushel of wheat ? " The 
only difference is that the wheat grower and the coffee 
planter have both had to pay a profit to several middlemen, 
in addition to the charges for freight. The result of this 
expense is that the man who consumes the flour gives a 
great deal more coffee for it than is received by the man 
who raised the wheat. And the man who consumes the 
coffee gives more wheat for it than is received by the coffee 
planters. 

What becomes of the surplus wheat not received or con- 
sumed by the coffee planter, and the surplus coffee not 
received by the wheat raiser? The answer is obvious. 
Part of it has been expended in paying the actual cost of 
transportation ; the balance of those commodities has been 
taken, by the merchants who carried on this barter, as 
profits. To get possession of this surplus, or balance of co7n- 
modities, is the object of those who conduct foreign commerce 
and tJu purpose for which they engage in it. 

THE INCENTIVE OF TRADE. 

In the foregoing example, it is apparent that the princi- 
pals of the trade are the wheat grower and the coffee 



-22 SOCIAL STRUGGLES. 

planter. It is also evident that the incentive to the ex- 
change of commodities is the antecedent fact that A has a 
surplus of the thing which B lacks and is ready and willing 
to exchange therefor an article desired by A. It further 
appears that a difference between the kind of money used 
in Illinois and that used in Brazil has not in the least hin- 
dered the trade. Why is this ? Simply because the 
Illinois man made the barter, not for the purpose of getting 
money, but for the purpose of getting coffee. The Brazilian 
made the barter, not for the purpose of getting the money 
of the Illinoisian, but for the purpose of getting his wheat 
in form of flour. The motives of the trade explain why 
it has been conducted as it has. 

WHY MEN ENGAGE IN FOREIGN COMMERCE. 

We have seen that the principals engaged in bartering 
wheat and coffee care nothing whatever about having a 
similarity between the money of Illinois and the money of 
Brazil. Let us now see whether the agents and subordi- 
nates in this barter care any more about such similarity 
than their principals do. The ultimate reason which in- 
duces the New York merchant to become a party to the 
aforesaid barter, is a desire to increase his wealth. The 
form of said wealth is entirely subordinate to the essential 
end and purpose ; to wit, its increase. He does not par- 
ticularly care whether he becomes possessed of Brazil- 
ian money, or any other money, or special thing, what- 
soever. The sole question before him is this : After this 
transaction be completed, will I have more wealth than 
at present? All other facts and considerations are second- 
ary, and no consequence whatever, except in so far as they 
may, or may not, tend to produce the final result desired. 
When considering the enterprise, he has before him the 
price of flour in New York stated in United States money; 
the price of flour in Rio Janeiro stated in Brazilian money; 
the price of coffee in Rio Janeiro stated in Brazilian money; 
the price of coffee in New York stated in United States 
money; and the expenses of conducting the business. It 



HOW PAYMENTS ARE MADE. 



52: 



is a simple problem in arithmetic. If the solution of this 
problem show the probability of his owning enough more 
United States dollars, or more dollars' worth, after the 
transaction be completed than before, to warrant the labor 
and risk, he embarks in it. Otherwise, he does not. 

Whether Brazil has or has not the same kind of monej^ 
as the United States, does not influence him in the least. 
He only wishes to know whether a profit can be made out 
of the trade. Neither would he be influenced in the slight- 
est by knowledge that the money of Brazil was superior to 
the money of the United States. He would care no more 
for that than for the fact that the climate of Rio Janeiro, in 
some respects, is superior to that of New York. 

USE OF BILLS OF EXCHANGE. 

In the aforesaid example, we have assumed that the 
value of the coffee given in exchange for the flour, was 
equal to that of the flour. Let us now see what occurs 
when the value of the coffee exceeds that of the flour. In 
such case, the balance due the Brazilian merchant would be 
first computed in the money of Rio Janeiro. This balance 
might then be paid in various ways ; but the principle of 
payment would always be the same ; to wit, payment would 
be made in a commodity. The agent in charge of the ship's 
cargo might pay this balance by having brought with him 
in the ship some bales of dry goods, some boxes of hard- 
ware, some agricultural implements, or some bars of silver 
or gold bullion. By some of these things, as commodities, 
the balance might be paid directly or indirectly, in Rio 
Janeiro. Or the ship's agent might say : " My principal 
has shipped a valuable commodity to Liverpool ; to wit, a 
large number of bales of cotton. In payment for that cot- 
ton there is due him another valuable commodity, to wit, 
so many ounces of gold or silver bullion. I have brought 
with me certain documents which are evidence of those 
facts. Now, I will give you an order directing the debtors 
of my principal to deliver as much of this commodity to 
you as is necessary to pay the balance due you." 
31 



524 



SOCIAL STRUGGLES. 



Thus the BraziHan merchant is placed in ownership of a 
commodity in London and the balance is thereby canceled 
between him and the New York merchant. The Brazilian 
merchant then directly, or indirectly, says to a coffee planter: 
" My stock of coffee is reduced. I wish to buy your crop. 
You owe a debt in London for dry goods. I own a valuable 
commodity in London. I will transfer to you the owner- 
ship of this commodity in payment for your coffee. You 
can then transfer this commodity to your creditors in Lon- 
don and you will then have paid your debt and I will own 
your coffee." 

The above named transfers of the ownership of commod- 
ities are made by what are called bills of exchange and 
drafts. These are nothing more nor less than a convenient 
means of exchanging one commodity for another and pay- 
ing a balance due one man, as a result of such exchange, by 
giving him some other commodity. 

HOW ENGLAND TRADES. 

England trades with every nation on the globe. Gold 
sovereigns are the peculiar money of England. But, when 
English merchants send out their ships on trading voyages 
they do not load them with sovereigns. They load their 
ships with commodities and send them to places where 
those commodities can be traded for other commodities, at 
such a ratio of exchange, as will insure a profit when the re- 
turn cargo is sold in England, or such other place as it may 
be carried. For example, England ships hardware and dry 
goods to Russia and takes hemp in exchange. The fact 
that the money of England is different from the money of 
Russia does not prevent such exchanges. The trade occurs 
because a man in Russia has a surplus of hemp and lacks 
hardware and cloth. At the same time, a man in England 
has a surplus of hardware and cloth and wants hemp. The 
men who carry on this barter are called foreign merchants, 
and they do so because they get a profitable fraction of the 
goods traded for doing the business. This fraction they 



RICH, WITHOUT MONEY. 



525 



get directly, or indirectly, as the case may be ; but they al- 
ways get it, or cease to carry on the trade. 

WHAT WEALTH IS. 

A man is not necessarily poor because he have no money. 
Wealth depends on the ownership of valuable things and 
on the capacity and means of creating other valuable 
things. For instance, here is a man who owns a thousand 
acres of fertile land. It is situated in a salubrious region, 
convenient to markets, and is under a high state of cultiva- 
tion. On it stands a substantial farm-house well supplied 
with furniture and every needed convenience. The barns 
and out-houses are commodious. The farm is stocked with 
the best breeds of horses and cattle and amply supplied 
with all kinds of agricultural implements and machines. 
The granaries are overflowing with grain. The dairy house 
is piled full of cheese and butter. Large amounts of hay lie 
untouched and stocks of grain are unthreshed. The farmer 
owns all these things free of debt, but he has only five dol- 
lars in money. Would any one be foolish enough to think 
such a man poor? He is rich because he owns a large 
amount of valuable commodities and is constantly creating 
more. These he can exchange for other commodities and 
supply his wants at will. 

What is true of an individual is equally true of a nation. 
Its wealth does not consist simply of money, but of valuable 
commodities and the power to create others. A nation 
with abundance of valuable surplus commodities need en- 
tertain no fears of being unable to barter them with other 
nations for other commodities. Whether her money be the 
same as that of other nations, or not, is immaterial. The 
essential thing is that she shall be able to give in exchange 
valuable products needed by other nations. And the kind 
of her money, in itself, has no influence on her foreign com- 
merce. Money of stable and uniform value is necessary to 
promote equitable dealings between her own citizens and 
enable them to easily hold industrial and commercial asso- 
ciation with each other. The money of Russia, Turkey, or 



526 SOCIAL STRUGGLES. 

Qermany does not concern the people of the United States 
any more than the school system of those nations, or any 
other feature or department of their domestic government. 
We should attend strictly to our own business and not 
meddle with that of other nations. American statesmen 
should see that American citizens possess a stable currency 
— no matter what currency other nations may have. 

WOULD IT NOT BE AN ADVANTAGE TO HAVE MONEY SIMI- 
LAR TO THE NATIONS WITH WHOM OUR TRADE IS 
CHIEFLY CONDUCTED? 

That depends on circumstances. If those nations main- 
tained a stable currency, it would be a trifling advantage to 
us to have a currency precisely like it. If their currency 
were unstable, it would be a disadvantage to us to conform 
ours to it. It is of great advantage to the United States to 
establish a stable currency for use in our own country ; but 
whether this currency be similar to that of Russia, Germany, 
or any other nation, is of comparatively little importance. 
It is a minor detail which should always be subordinated to 
the vital and essential thing, uniformity of value. 

It would be some commercial convenience if the Rus- 
sians, Germans, French, Spanish, Portuguese, Italians, and 
Turks would all abolish their own, and use the English 
language. But there is not the slightest probability at 
present of their doing so. If they did, the only commer- 
cial advantage we should derive from it would be a saving 
of the existing necessity of translating those different lan- 
guages into ours. But this is not a serious impediment to 
interchange of ideas. Considerable numbers of persons are 
familiar with more than one language and readily translate 
one into another. After that is done, the printing press 
becomes a universal interpreter and translator. 

So long as a diversity of national language exists, every 
merchant engaged in foreign commerce must directly or 
indirectly use the services of an interpreter and translator. 
The person who does this work at the same time translates 
foreign money into domestic money. If Germany adopted 



SCARCITY OF SILVER. 



527 



the English language and used the same kind of metallic 
money as ours, a translation of German money into United 
States money would still be necessary unless we could per- 
suade the Germans to discard the use of " marks " and sub- 
stitute "dollars" therefor. The far distant future may 
witness a change of this kind, — but it is idle to specu- 
late upon it. Even if such a change were accomplished 
its chief advantage would be the saving of a little arith- 
metic. As all commercial transactions must in any con- 
ceivable case be computed, such an economy would be 
comparatively trifling. Every foreign merchant has printed 
tables, which enable him at a single glance to translate 
one kind of money into another. Whether this money 
be made of gold or silver makes no difference in the princi- 
ple on which this translation is made. 

WHAT EFFECT WOULD UNLIMITED COINAGE OF SILVER 

PRODUCE? 

What the relative value of gold and silver will be in the 
future no one can accurately predict, simply because no 
one knows what conditions those metals will hereafter be 
under. Our positive knowledge in that respect is bounded 
by the fact that the circumstances and conditions relating 
to them then, as now, will determine both their value rela- 
tive to each other and toward all other things. 

The unlimited coinage of silver would increase the num- 
ber of dollars in circulation. The value of each one of 
those dollars would not be less than the value of the silver 
bullion contained in one of them. We have heretofore 
shown that this bullion has now a greater value than it had 
in 1872, but this is less than the present value of one of 
our coined dollars. Under unlimited silver coinage the 
value of each one of our dollars would closely approximate 
the value of the gold dollar in 1872. The prices of com- 
modities, the rate of wages and the price of real estate 
would consequently rise to about the level they stood in 
1872, stated in gold. The men now unable to sell their 
goods and lands, and consequently overwhelmed with debt, 



528 



SOCIAL STRUGGLES. 



would be relieved from the condition created by the de- 
monetization of silver and the consequent arbitrary changes 
in the relative value of dollars and commodities. This 
would revive business, diminish the number of idle persons 
and the amount of idle machinery and thus increase our 
daily production of wealth. It would strengthen the ten- 
dency for this country to become by far the richest nation in 
the world. This would necessitate the use of an additional 
amount of money. 

Whether we should then use nothing as metallic money 
but silver coins, no one can predict with absolute certainty. 
Under present conditions it is extremely probable that still 
less gold than at present would be in circulation. 

SILVER BULLION WILL NEVER BE EASILY OBTAINED. 

But we must remember that the demand for silver rela- 
tive to the supply, both for use in the arts and for money, 
is steadily increasing, as fully shown heretofore by tables 
of average relative prices. This fact has been obscured by 
the more conspicuous advance in the value of gold, but its 
existence is nevertheless certain. A great commercial 
development, is progressing in Asia, Africa and South 
America, all silver-using continents. Their population is 
so numerous, and their present stock of silver so relatively 
small, that the addition of twenty-five cents per head to 
the silver in use among them would immediately change 
the present relative value of silver and gold in a marked 
degree. An active demand for silver for the Asiatic trade 
may spring up at any time. Whenever a change of this 
kind is seen to be inevitable, the probabilities are that the 
mints of the Latin Union will be opened for silver coinage 
more freely than at present. Such a succession of steps 
may soon occur, and as our ratio of coinage is sixteen 
pounds of silver to one of gold, while that of Europe is 
fifteen and a half of silver to one of gold, it would not have 
to proceed very far before the bullion value of a United 
States silver dollar would approximate the value of a gold 
dollar sufificiently to prevent gold exportation. Moreover, 



THE TRUE END OF LA W. 



529 



the considerations heretofore set forth show that the mate- 
rials from which our money shall be made is of very little 
importance. Stability of the amount of money is the vital 
thing. 

It should also be borne in mind that the large amount 
of gold which the United States have drawn from Europe 
during the last ten years has powerfully tended to widen 
the difference between the relative value of gold and silver 
on that continent. Whenever any considerable portion of 
the gold now held in this country is returned to Europe, a 
result will be produced precisely the opposite of that caused 
by diminishing the amount of gold there held. Every 
million dollars' worth of gold shipped to Europe tends to 
lower the value of gold in Europe and correspondingly 
enhance the relative value of silver. 

But there are other far more important considerations 
than the foregoing. So long as we use gold as money, in 
order to retain gold in this country we must increase the 
wealth of this country. In the words of Adam Smith : 
" Gold and silver, like other commodities, naturally seek 
the market where the best price is paid for them, and the 
best price is commonly given for everything in the country 
which can best afford it." In order to increase our wealth 
we must keep the labor and machinery of the country fully 
at work, and this can best be done by abandoning the idea 
of enacting special legislation to retain gold in this country, 
and instead of that absurdity adopting a policy better fitted 
to promote equity between all classes of persons. 

THE END WHICH LAWS SHOULD SEEK. 

The ultimate object of our Government should be to 
advance the material prosperity, the happiness and the 
intellectual and moral development of all those within its 
jurisdiction. So long as these purposes are fulfilled, it is of 
little consequence whether a large or a small amount of 
gold remain in this country. If gold leave us, as it may, 
it will only be because we can more profitably sell than 
keep it. Its owners will not give it away. 
34 



530 SOCIAL STRUGGLES. 

A considerable portion of Adam Smith's " Wealth of 
Nations" is devoted to showing the fallacy of legislation 
enacted on the theory that the wealth of a nation is deter- 
mined by the amount of the precious metals within its 
borders ; and that therefore measures should be adopted 
to prevent their exportation. Adam Smith's arguments 
on that matter have never been refuted. They apply with 
the same force to our present situation as they did to Eng- 
land in 1775. 

What would be thought of the wisdom of a merchant 
who owed $50,000, drawing interest, and kept $50,000 
locked up in his safe? If it would be wisdom for an indi- 
vidual to use his idle money to pay interest-bearing debts, 
it is wisdom for a nation to pursue the same policy. By 
so doing the national wealth would not be diminished. 
Qn the contrary, its condition would be improved, and a 
drain for interest account stopped. 

Under a correct monetary system there would be no 
more reason for being alarmed because five millions of gold 
were shipped from this country in a week than for alarm 
because five million dollars' worth of some other commod- 
ity were exported in a week. 

A rich merchant, unaware of the greater wealth of Girard. 
is reported to have petulantly said to him, " I can buy you, 
and sell you." To which Girard calmly replied, " That is 
true. But I can buy thee and keep thee." 

An increase of capital, a greater diversity and a greater 
power of annual production, more fixed wealth, more con- 
tented and intelligent laborers, and freedom from foreign 
indebtedness will enable the. American people not only to 
buy gold whenever they have use for it, but also give them 
power to keep it when they wish to do so. 

THE PAR VALUE DELUSION. 

With unlimited coinage, free from any charge beyond its 
actual cost, gold and silver may properly be called commod- 
ity money. That is, the normal value of a silver coin is 
the value of the silver bullion contained therein, plus the 



EFFE CT OF NUMBERS. 5 3 1 

cost of coinage. And in like manner the normal value of a 
gold coin is the value of the gold bullion contained therein, 
plus the cost of coinage. But it must be steadily borne in 
mind, that this is only the case under unrestricted coinage of 
both metals. 

Whenever any legislative interference be interposed to 
the free coinage of both gold and silver, the nature of 
money made of those metals is radically changed. It 
ceases to be a commodity money and at once partakes of 
the nature of paper money. Its commodity character is 
more or less merged into a numerical value. We have 
heretofore found that the value of a coin depends on the 
number of those coins in circulation. Under free coinage 
of both gold and silver, the number of gold and silver coins 
depends chiefly upon the amount of gold and silver bullion 
in existence. The amount of material from which those 
coins can be made is thus the dominant fact which fixes 
the value of one of those coins. Legislation cannot in- 
crease the amount of bullion, and so long as the weight and 
fineness of coins are unchanged, their value depends to a 
considerable extent on the amount of bullion in human 
possession. 

EFFECT OF LIMITED COINAGE. 

But the moment legislation by any means whatsoever 
determines the number of legal-tender coins, their number 
is then determined by law, and not by the automatic in- 
crease or decrease in the amount of the commodities from 
which they can be made. This is so simply because the 
number of coins is no longer influenced by the amount of 
bullion ; that dominant fact under free coinage, is elimi- 
nated and in place of it is substituted the legislative enact- 
ment which determines the number of coins regardless of 
the amount of bullion. 

We have heretofore discussed the fact that the value of 
one commodity, of two things which are used for a similar 
purpose, can be affected without increasing or diminishing 
its amount. Any fact which changes the amount of the 



532 



SOCIAL STRUGGLES. 



other commodity has substantially the same ejffect as a 
direct interference with the use and amount of the first 
named commodity. 

It therefore follows that in order to change the commod- 
ity value of a silver coin it is not necessary to directly inter- 
fere with the coinage of silver. An interference with the 
free coinage of gold would produce the same result. Fur- 
thermore, it follows that a change in the commodity value 
of a gold coin can be produced without interfering with the 
free coinage of gold. An interference with the coinage of 
silver will produce the same result. 

No matter which metal is denied free coinage, while the 
other is unrestrictedly coined, the bullion, or commodity, 
value of the metal which is coined will always equal the 
value of one of the coins made therefrom, less the cost of 
coinage. But the value of one of the coins made from the 
metal denied free coinage will be greater than its commod- 
ity value. A new condition has entered to affect its value ; 
viz., legislative restriction on the number of those coins. 
To the effect of the number of such coins, due to natural 
limitations of their material, is added the legislative restric- 
tion on the amount of this material which shall be con- 
verted into coins. If this legislative restriction be rigid 
enough, coins made from a metal with less commodity 
value than the metal freely coined, will have the same value 
as the coins whose commodity value and coined value differ 
only by the cost of coinage. Thus, at the present time 
gold is unrestrictedly coined while the coinage of silver is 
restricted. The result is seen in an increased value of gold 
bullion, and a consequent increase of the value of the coins 
made therefrom. The silver coins have the same value as 
the gold coins because restricted in number. In other 
words, both the gold coins and the silver coins are at a pre- 
mium above their normal value ; viz., their commodity value 
under free coinage of both metals. For it must be steadily 
remembered that the value of one of all the coins in use 
depends upon the total number of such coins. As a result 
of this principle, an increase of the number of silver coins 



DIMINISHED NUMBER, INCREASED VALUE. 



533 



has precisely the same influence on the value of each and 
every one of the gold coins, that would be exerted if by 
some chemical process, silver could be transmuted into gold. 
In either case the practical result would be the same, i. e., 
an increase in the total number of legal-tender coins and a 
corresponding decrease in the value of each one of them. 

ARTIFICIAL VALUE OF COINS. 

The artificial price, the premium above their normal 
value, which a gold dollar and a silver dollar now command 
is shown by the average scale of prices being lower by rea- 
son of restricted coinage. This premium on legal-tender 
coins above their natural value under free coinage could be 
increased to ten times what it now is ; or, in face, to almost 
any conceivable extent. All that would be requisite to 
produce this result would be to still further restrict the 
coinage. Silver coinage and the use of silver already 
coined could be abolished. After that another step might 
be taken in the same direction. The coinage of gold could 
be placed under such restrictions that the value of a gold 
coin would be many times greater than the value of the 
bullion contained therein. The difference between a gold 
coin and its materials could be made as great as the differ- 
ence between the value of a one-dollar greenback and the 
value of the paper rags from which that greenback is made. 
Sufficient limitation of the number of gold dollars would 
make the term '' one gold dollar " mean as much value 
as the term " twenty gold dollars " now does. In fact, 
the value of " one gold dollar " would depend only on 
the practical extent to which a restriction of the number of 
those dollars and the number of other fellow legal-tender 
dollars, could be carried. 

HARD PAN. 

If the reader will carefully ponder the foregoing consid- 
erations he will recognize the fallacy of the popular ideas 
in regard to what is called " hard pan." That is, the no- 
tion that by using a gold currency, a scale of prices is 



534 



SOCIAL STRUGGLES. 



reached which it is impossible shall become any lower, and 
therefore are " hard-pan prices." When we consider that 
prices always reflect the value of the units in which they 
are stated ; and that the value of one of these units de- 
pends on the total number of those units, we see that varia- 
tions in prices depend on variations in the number of mone- 
tary units. Filially, we see that the only " hard pan " limit, to 
zvhicJi prices may be depressed, is the practical extent to which 
the mass of mankind will allow those, who could make a profit 
by restricting the number of monetary units, to actually do so. 
Under unrestricted coinage and free circulation of both 
gold and silver coins, there is a natural limit below which 
prices will not usually fall. That is determined by the 
total number of coins in circulation, which fact is largely 
governed, under such conditions, by the amount of bullion 
in human possession. But whenever a limitation be made 
of the number of coins in use, the only limit to a fall in 
prices is the extent to which the use of coins is restricted. 
And it practically makes little difference how this limitation 
of the number of coins is produced. It may be by the de- 
monetization of silver ; by the demonetization of gold, by 
locking up the coins, or by a variety of other methods. 
The essential thing to lower prices being a contraction of 
the number of monetary units in circulation. 

GOLD PREMIUM. 

Many persons imagine that unrestricted coinage of silver 
would produce a premium on gold dollars and make them 
dearer than at present. The simple fact is that a premium 
on a gold dollar already exists. Its value has been enhanced 
by legislative restrictions on silver coinage. This premium 
is now obscured from the view of ordinary observers by the 
fact that limitation of silver dollars has given them a pre- 
mium also. But unrestricted coinage of silver would re- 
move the " par value " delusion and make the actual fact 
apparent to all. 

Instead of making gold dearer, as is commonly supposed, 
such a measure would cheapen the gold dollar. Superfi- 



HOW TO ASCERTAIN VALUE. 535 

daily it might appear higher but in reality it would be 
lower. For example, in the month of December, 1872, the 
gold dollar was at a premium of 13 per cent, over the green- 
back. When this premium disappeared many supposed 
gold had been " cheapened by resumption." In fact, that 
view of it was stated in thousands of newspapers. Although 
gold is now at par with greenbacks it is really much dearer 
than in 1872. 

TRUE TEST OF VALUE. 

The only accurate test of the value of a dollar is this : 
How much labor or how much of the products of labor 
must be given in exchange for it ? What must be paid to 
get it ? Whoever doubts that gold is dearer now than in 
December, 1872, is invited to compute how much labor, or 
how much of one of its products, was required to get a hun- 
dred gold dollars then, and how much is now required. 

The aforesaid considerations show that the unrestricted 
coinage of silver by the United States would inevitably 
lower the present value of a gold dollar. How much it 
would lower it no one can compute with accuracy, because 
there are several conditions involved not definitely known. 
If one hundred millions of the gold now locked up in this 
country were displaced by silver and shipped to Europe, 
the effect on the value of the gold in Europe would be the 
same as if we had shipped one hundred millions of silver to 
Europe and on the voyage it had, by a chemical process, 
been converted into gold. In fact, there would then be 
one hundred millions more gold in Europe and the value of 
each ounce of gold would be correspondingly lowered. A 
general rise in European prices would be the result. The 
present disparity between the value of gold bullion and sil- 
ver bullion would be diminished. The gold dollar might be 
nominally five, or ten per cent, above the value of the silver 
dollar, but in reality it would be much cheaper than now. 
Less labor would be required to obtain one gold dollar. 



536 SOCIAL STRUGGLES. 

HOW EVILS CAN BE AVERTED. 

In view of the readiness with which prices can be de- 
pressed, by contraction of the currency to a point so low 
that every person in debt twenty-five per cent, of his total 
assets would thereby be made bankrupt and penniless, the 
question naturally arises : What security have the masses of 
the people that the few persons who would profit by such a 
contraction will not at any time influence legislation and 
produce it ? The answer is the same that applies to the 
question of protection from all kinds of aggression and 
wrong; to wit, the intelligence, vigilance, and courage of 
the people. " Eternal vigilance is the price of liberty." 

The wrongs and sufferings which have recently been 
inflicted on the masses of Europe and this country, were 
possible because the people have hitherto neglected to 
study economic principles and consequently were easily 
misled. Especially is this true of the United States,, 
where every man by his ballot has a share in the Gov- 
ernment. Besides failing to observe the grave defects 
in our financial laws and modes of taxation, the majority 
have not seen that the existence of a large proportion of 
monopolies is chiefly due to the present system of granting 
patents and franchises. Ignorance and carelessness on the 
part of the many have enabled a few cunning and unscrupu- 
lous persons to plunder millions of people so silently and 
imperceptibly, that they did not recognize the hands which 
committed the theft. 

SOCIAL PROBLEMS WILL ALWAYS BE BEFORE MANKIND. 

So far as we can learn from history, the average man of 
the year 1885 has the same disposition to take advantage of 
his fellow mortals, that the average man had in the year 85. 
Those who fancy that our laws will soon be such that fur- 
ther watchfulness to prevent spoliation by class legislation 
will be unnecessary, ignore all the lessons of the past. The 
social and financial problems now under public debate are 
not before us for a day, or a year, but for all time. They 



UNCHANGING PRINCIPLES. 537 

can only be solved by reference to eternal principles ; and 
knowledge and practical application of those principles 
will always be requisite to secure the highest welfare of 
mankind. A class, comparatively small in numbers, but 
powerful by reason of wealth and compact organization, 
will always be on the alert to take covert advantage of the 
majority, and under cover of law and some hypocritical pre- 
tense, adapted to the occasion, quietly appropriate the 
labor and goods of those who neglect a constant and intelli- 
gent defense of their own interests. 

The inference from the aforesaid facts is obvious. Our 
Government derives its authority from the will of the vot- 
ers. Unless the majority of voters are intelligent enough 
to recognize the measures adverse to their interests, a cun- 
ning minority will mislead them into voting for laws which 
will enrich the few at the expense of the many. The only 
safeguard against such an ever present danger is a widely 
spread knowledge of the true principles of Political Economy 
and Finance. 

WHAT INFLATION CAN DO. 

Every fact and principle heretofore stated concerning the 
effects and evils of diminishing the amount of money and 
lowering the general scale of prices, when such amount of 
money has been conformed to by all the business of the 
country, are equally true, whenever the case be reversed and 
a great increase made in the amount of money. Such 
money, no matter what guarantees of its payment may 
exist, no matter how imperatively all persons are required 
to receive it at its face value ; no matter how much wealth 
may be pledged for its "redemption," will certainly depre- 
ciate. The fatal defect of an excessive number of monetary 
units admits of no remedy short of a diminution of those 
excessive numbers. 

CONFEDERATE MONEY. 

During the recent "unpleasantness" between the North- 
ern and Southern States, I witnessed a striking example of 



538 SOCIAL STRUGGLES. 

the truth of the foregoing statements and of the faciHty 
with which men can not only mislead others but also deceive 
themselves. The fortunes of battle left me in a hotel 
whose landlord was so anxious to protect his guests from 
burglars and other harm that he guarded their residence 
night and day with armed men. The Richmond papers 
were daily brought us by newsboys in quest of our money. 
Prices throughout the Confederacy had then largely risen 
as an inevitable sequence of the issue of an immense num- 
ber of Confederate dollars. But these papers used a kind 
of reasoning in regard to this fact similar to that used by 
New York papers in 1885, in regard to contraction. That 
is, almost every conceivable cause for the admitted change 
of prices was alleged, but the actual one. Not one of 
them appeared to think a change in the total amount of 
money in circulation had anything to do with the change 
which had occurred in the value of money; and that the 
scale of prices expressed the altered value of the mon- 
etary unit. They gravely stated that prices were high 
because of under production ; the blockade ; the diffi- 
culty of shipping goods from one place to another because 
the armies used the railroads ; want of labor because so 
many men were in the army ; the waste of war ; fears that 
the negro laborers would get beyond the lines protected 
by Confederate troops, etc., etc. 

A COTTON BASIS FOR MONEY. 

These editorials informed their readers that the Confed- 
erate Government could safely continue to issue hundreds 
of millions of dollars. The reason assigned was that, unlike 
any other similar emission of paper money which had ever 
taken place in the history of mankind. Confederate money 
was based on cotton, and cotton was a recognized form of 
wealth in every quarter of the globe. They argued that no 
matter how much money the Confederacy might issue, so 
long as each dollar had behind it a dollar's worth of cotton, 
either in actual existence, or that could readily be produced, 
such money would not depreciate. Prices would be tempo- 



REPE TITION OF HISTOR V. 5 39 

rarily high by reason of other causes, but the amount of 
such money could not cause a rise of prices. 

Then computations were made to show how easily the 
Confederacy, after obtaining its independence (which was a 
certain event), could raise whatever amount of cotton that 
might be needed to "redeem" every dollar based on cotton. 
The necessity of cotton to all mankind was dwelt on with 
great minuteness. The idea of questioning the absolute 
truth of the aforesaid propositions was deemed too absurd 
to merit serious refutation. The treatment of those who 
ventured to even doubt the aforesaid doctrines, was addi- 
tional evidence that there are two kinds of very disagreeable 
people ; to wit, those who tell unpleasant lies, and those 
who tell unpleasant truths. 

The ugly fact that the prices of commodities, stated in 
this vaunted money, continued to rise was sedulously as- 
cribed to causes other than the real one. In fact, their 
arguments in substance were the arguments, ?rversed, which 
all readers of papers in favor of making gold the sole legal 
tender have recently seen. " The amount of money had 
nothing to do with the alteration in prices." This last 
statement was deemed proven by an allegation similar to 
that employed to show that falling prices cannot be due to 
exclusive use of gold ; viz., " Because the money was so 
good, it could not possibly create a change of prices." 

We all know the final result of this cotton experiment. 
The money steadily sank in value with each million put in 
circulation until the amount of it became so enormous that 
each dollar was worth less than one cent, and then no one 
wanted it at that rate. From the beginning of this experi- 
ment to the end, precisely the same fact appeared which has 
always been developed in every historical inflation of the 
currency, viz.: the change in prices faithfully recorded both 
the change in the amount of the money and the conse- 
quent alteration of its value. ''^ 

* The following is a copy of a voucher for hospital supplies made 
three days before the fall of Richmond, the original being the property 



540 SOCIAL STRUGGLES. 

WHY GOODS ARE NOT SOLD WHEN ACTIVE INFLATION 
IS PROGRESSING. 

Another striking fact was developed ; and as the altera- 
tion in the amount of the currency was precisely the op- 
posite of contraction, this fact was precisely the opposite 

of C. G. G. Merrill, of this city. The prices named were, of course. 

Confederate money : 

General Hospital No. 9. 

1865. To Wm. T. Feutress, Steward. 

March 22d, 3 chickens $90.00 

" " Herbs 10.00 

" " Onions for hash 10.00 

" 23d, I peck sweet potatoes 33.00 

" " 3 doz. eggs at $20 60.00 

" " Pickle 10.00 

•' 24th, I door mat 1 2.00 

" " 3 large shad 90.00 

" " 2 large fowls 90.00 

" " I bushel turnips 35-oo 

" "I peck sweet potatoes 35-oo 

" 27th, Ashes for soap 10.00 

" " I bushel turnips 30.00 

" " Herbs for soup 5.00 

" 28th, Herbs and onions 20.00 

" 29th, Marketing, herbs, &c 8.00 

" " Repairing wagon 6.00 

" 30th, Onions 10.00 

" " I bunch herbs i .00 

I565.00 
Received at Richmond this 31st day of March, 1865, of John J. Gra- 
vatt, Surgeon P. A. C. S., the sum of five hundred and sixty-five dollars 
in full of the above amount. 

William T. Feutress, 

Hospital Steward. 
I certify that the articles purchased as above are necessary ; are for 
the exclusive use of the sick and wounded soldiers, C. S. A., in General 
Hospital No. 9, and will be applied to their subsistence and comfort 
alone, and that the articles could not be purchased at a lower rate. The 
property in this voucher will be borne on my return for the half year 

ending June 30th, 1865. 

Surgeon in Charge. 



WHEN GOODS ARE HOARDED. 



541 



of the phenomenon produced by contraction. In times of 
contraction prices are falhng, and every one is anxious to 
sell his goods and keep his money. But in the Confederacy 
inflation was in progress, and, as an inevitable result, every 
one wanted to keep his goods and sell his money. The rea- 
son was obvious. Money was diminishing in value very 
rapidly. Goods were rising in price so fast that when a 
merchant had sold at retail he could not replace at whole- 
sale prices. He was worth less than if he had closed his 
store when it was full of goods. If a man could buy a 
stock of goods on six months' credit, a handsome profit 
was certain. Before the six months had passed the price 
of half the goods would pay the note for the price of all 
of them, thus leaving the other half of the goods as profits, 
provided their owner kept them in form of goods. 

In short, commerce was diseased. The malady and the 
symptoms thereof were exactly the opposite of the busi- 
ness derangement which has recently gorged New York 
and other financial centers with idle money, while on every 
side great numbers of persons became bankrupt through 
inability to exchange their goods for money. In New 
York money has been rising in value and its owners have 
thereby been prevented from buying goods. They have 
been waiting for still lower prices of goods and higher value 
of money. In Richmond goods were rising in value and 
their owners were disinclined to sell them because the 
money in which payment would be made was falling in 
value. 

If the Confederacy had obtained its independence, only 
one course would have suf^ced to restore prices and the 
value of their money to the rate prevailing at the com- 
mencement of the war. That course would have essentially 
consisted of levying, in some form, a tremendous tax on 
the whole people to be paid in depreciated money, and the 
destruction of this money as soon as paid into the public 
treasury. If this had been accomplished to the requisite 
extent, the value of the remaining money would have been 
raised. But it is extremely unlikely that any other course 



542 



SOCIAL STRUGGLES. 



would have been adopted but that which has followed such 
enormous issues of money, — -repudiation of all of it. 

HOW TO PREVENT INFLATION. 

There is only one safeguard against the evils of infla- 
tion. That is the same and the only thing which can pro- 
tect us against contraction, to wit, public intelligence 
regarding the principles of finance. No people will ever 
allow themselves to be misled and deeply suffer the evils 
of either a contraction or an inflation of their money, who 
fully understand one simple fact, viz.: The average scale of 
prices is ahvays a correct indication both of the amount and 
the value of the money in which those prices are stated. 

Whenever the principle illustrated by this fact is gener- 
ally comprehended, the people will perceive what is going 
on, whenever a change occurs in the rate of prices on which 
business and contracts have been adjusted and formed. 
They will then at once instruct their servants that the 
national financial policy is faulty. 

STUDY OF SOCIAL TOPICS. 

The quotation from the Century magazine in the preface 
of this volume is a fair illustration of the state of mind in 
which a multitude of well meaning, intelligent persons are 
in regard to some social questions. They see that there is 
something wrong, else the present conditions would not 
exist ; but where the fault lies, or what it consists of, they 
fail to recognize. 

This perplexity does not arise from inability to reason 
properly ; but from assuming certain fundamental premises 
to be true which in fact are false. Thus, the editor afore- 
said reasons admirably from premises he has not examined. 
He says, " Money is plenty and prices low." His whole 
statement of the case rests on the supposition that low 
prices and a large amount of hoarded money are evidence 
that " money is plenty." 

The causes which led an intelligent and conscientious 
gentleman to commit this error have heretofore been re- 



NEED OE HUMILITY. 543 

cited. The matter is here alluded to simply because it is 
one of many kindred mistakes constantly being made from 
a precisely similar reason, viz., Neglect to tJioroiigJily test a 
foundation before beginning to build upon it. 

No one can compute how many bricks will be required 
to build a given wall unless he first ascertain the number 
of bricks in one cubic foot of that wall. The same thing 
is true of every other problem whatsoever, no matter to 
what subject it relates. The bottom facts — the fundamen- 
tal principles must be accurately learned before a single 
safe step toward a solution of the question can be taken. 

The study of finance and other economic subjects is gov- 
erned by the same rules as the investigation of all other 
matters. Inquirers should assume themselves completely 
ignorant of knowledge they wish to acquire, and lay aside all 
prejudice and superstition. Students must " become as lit- 
tle children " and begin at the bottom of whatever they 
wish to thoroughly understand. All accurate learning is 
otherwise impossible. 

A man should not hesitate to accept a demonstrated fact 
and ask : Is this in accord with what I have heretofore be- 
lieved, and is it as safe ? That has properly nothing what- 
ever to do with the examination. The sole question with 
which every proposition should be challenged ought to 
be : Is this true? 

Furthermore, a person should not allow himself to get 
befogged by anxiety in regard to the effect which knowl- 
edge of a new fact or principle will have upon society. He 
should have confidence enough in the Creator of all Truth 
to prevent fear of the consequence either of its discovery 
or dissemination. Otherwise, he is guilty of the presumpt- 
uous folly of imagining himself and fellows wiser and more 
conservative than the Infinite. 

Whoever correctly understands financial principles is 
not, like others, bewildered by every change in the mon- 
etary situation. A person ignorant of the fundamental 
principles of arithmetic may be shown how to mechan- 
ically . solve one arithmetical problem. But, if another 



544 SOCIAL STRUGGLES. 

one be presented to him which differs in the least from that 
done without reference to principles, he is utterly unable to 
take a single step toward its solution. In like manner, abil- 
ity to correctly interpret the various financial facts which 
are constantly arising depends on a clear perception of the 
principles involved. 



CONCLUSION. 



Many other topics invite discussion but the limits assigned 
for this book have been reached. The chief intent has 
been to state facts and correct principles, to stir the slimy 
pools of superstition, rather than to present remedial meas- 
ures in detail. Its many defects and shortcomings are en- 
trusted to the kindness of a good-natured public. 

Even if this work were a perfect picture of the situation 
of affairs to-day, it would be imperfect to-morrow. Condi- 
tions and circumstances are incessantly changing. Princi- 
ples alone remain fixed. Moreover, our knowledge of 
principles and consequent ability to properly apply them 
to a given state of facts are steadily changing. 

We are not quite as helpless as chips floating in the 
middle of a river. We have a limited power to control our 
destinies. But this little can only be done by adjusting 
ourselves to the new conditions into which the irresistible 
stream of events on which we glide is constantly bringing us. 
Suppose the captain of a sailing vessel, when starting from 
New York on a voyage to Liverpool, should say: " Now, I 
am going to be wise and conservative. I shall put my sails 
and rudder just right when I start, and keep them un- 
changed until my destination be reached." Such manage- 
ment would never bring a ship across the ocean. The sails 
and rudder may be right on leaving New York but they will 
not remain so, unless steadily changed to meet the varying 
conditions which the ship will encounter during her passage. 
In like manner, the Social Ship on which our race is em- 
barked cannot now be properly guided by the means ade- 



CHANGE NECESSITATES CHANGE. 545 

quate at the beginning of her journey. We have floated 
into different waters and are menaced by different gales. 
Human progress and invention have developed and created 
different conditions and each year widens the difference be- 
tween the Present and the Past. 

Justice is always justice. Equity is always equity. But 
the means best adapted to secure and promote justice and 
equity change with altered circumstances. Let us not then 
embrace the narrow delusion that " conservatism " consists 
in keeping our social sails and guiding machinery un- 
changed, no matter into what currents we may drift nor 
from what new direction a storm may threaten. Such con- 
duct is at once shallow and unavailing. It is the favorite 
device of little persons posing as profound thinkers and 
statesmen. It will neither guide us aright nor enable us to 
evade consideration of the social problems slowly but inces- 
santly arising. Cowardice is useless. Whether we wish to 
or not, we must bear and discharge the new responsibilities 
and duties which every year will surely bring us. 

An unseen Being has placed us on earth and appointed 
the narrow bounds we cannot pass. Borne swiftly onward 
by forces beyond our control, wisdom bids us recognize the 
inexorable laws which govern us. We cannot change them 
if we would. Nothing is possible for us, but, in an imperfect 
way, to bring our conduct in harmony with them. And, 
when these mighty forces bring new conditions and evolve 
new facts, we must either conform our institutions to them 
or be destroyed while attempting a foolish resistance. 

Many persons, anxious for distinction, and perhaps im- 
bued with a genuine love of good works, regret that Provi- 
dence did not perm.it them to take part in some of the great 
reformatory and progressive movements witnessed in the 
past. Such persons should reflect that, although our race 
has compassed great achievements, an enormous work lies 
before it. For aught we know, the work undone is greater 
than that accomplished. We are still in ignorance of a 
multitude of things. Our social machinery still needs 
reformation. 
35 



546 SOCIAL STRUGGLES. 

In the preface of a medical treatise, written at the begin- 
ning of this century, these words appear: "The present 
perfect state of medical science renders it impossible to 
hereafter record any further discoveries. We can only ar- 
range what is already known." 

As a man who should now practice the aforesaid " per- 
fect state " of medicine would justly be lodged in jail for 
manslaughter, we smile at the conceit of this simple-minded 
doctor. But are we not all, more or less unconsciously, 
every day doing essentially what he did ? Nothing is 
more common and more presumptuous and shallow than 
the assumption that Wisdom is incarnated in the present 
generation, and that further progress is impossible. Great 
wrongs remain to be righted and great dormant truths await 
the touch of the Reformer capable of their elucidation. 

Therefore, O man of the Nineteenth Century, be not too 
confident that your beliefs are correct and your knowledge 
perfect. As if on a mountain of wisdom, you wear a com- 
placent smirk and look with pitying contempt on the man 
of the Fourteenth Century. But, is it not perfectly cer- 
tain that the man of the Twenty-fourth Century will mete 
you your own measure and will wonder how you bore an 
existence darkened with so much superstition and igno- 
rance ? Your palpable deficiencies and the ill devised so- 
cial organizations you have constructed should teach you 
Humility. History should inspire emulation of the peace- 
ful victories of your predecessors. Trust in, and love of 
Truth should give you an industry and patience in its pur- 
suit that nothing can either weary or discourage, and make 
it easy to discard traditional errors without misgiving or 
fear of the result. 

Steady ! Forward ! 



APPENDIX. 



A REVIEW OF THE FINANCIAL PORTION OF THE FIRST MESSAGE OF 
PRESIDENT CLEVELAND AND THE ACCOMPANYING REPORT OF 
THE SECRETARY OF THE TREASURY. 

The foregoing was written prior to December i, 1885. Since 
that time, the Message of President Cleveland and the Report of 
his Secretary of the Treasury have been published. The present 
administration has taken the position that its policy should be 
in accordance with the interests and wishes of the great moneyed 
capitalists, bondholders and bankers. This is evidenced by the 
fact that all the President's financial suggestions are applauded 
and approved by the newspapers which act as the spokesmen of 
those classes. 

These documents are therefore very interesting for two reasons. 

First : They are an authentic statement by the virtual attorneys 
of Wall Street of the beliefs and desires of the money lending 
and financial center of this country. 

Second : It is perfectly certain that the vast moneyed interest 
which, to further its own aggrandizement, is intent on making 
gold the sole legal tender, would shrink from no expense requisite 
to secure the best available talent in the world to aid in the prep- 
aration of an argument in its behalf which, at public expense 
and with the weight of official authority, would be placed before 
the whole American people and largely before the civilized world. 
Therefore we can reasonably presume that these documents con- 
tain as good an argument in favor of demonetizing silver as can 
be made. 

What profound and scientific principles are set forth in these 
official papers to prove that gold should be made our sole legal 
tender with free and unlimited coinage ? None whatever. The 
arguments heretofore shown to be fallacious are merely reiterated. 

What evidence is adduced to demonstrate that silver coinage 
is an evil.'' None whatever. The same report which tells us 
we have 2 p>5, 000,000 silver dollars and that more would inflict 

547 



548 APPENDIX. 

disaster, informs us that France has about 600,000,000 of sil- 
ver dollars in circulation. The population of France is over ten 
millions less than the population of the United States ; her 
wealth is less than ours ; and her growth in population, commerce 
and wealth is vastly inferior to that of this country. Yet the 
authors of these State papers do not say that France is suf- 
fering by reason of too many silver dollars. But a simple cal- 
culation shows that, leaving our rapid growth of population out 
of the question, it would require twenty-one years of silver coin- 
age, at the present rate, before we have as much silver in this 
country as circulates in France. 

These documents say that silver coinage is an evil. But to whom 
is it an evil ? Is it not evident that the few rich money lenders 
for whom these documents speak, regard silver coinage as an evil 
because it is a hindrance to gains desired by them at the expense 
of the rest of the community ? 

Both of these official addresses base and rest all their argu- 
ments and statements on one assumption : viz., that gold in some 
mysterious way which, singularly enough, they do not think it 
wise to explain, has a fixed, an unchanged and an unchangeable 
value. It is presumed that no matter how much the demand for 
gold may be increased, no matter how much its actual or relative 
amount may be changed, it still remains at a " fixed value." As 
we have heretofore dissected this idea, and found it a kindred 
error to the notion that the earth stands still and the sun revolves 
around it, further discussion of this assumption is unnecessary. 

Both the Message and the Report are redolent of the prevalent 
delusion that the common sense business principles which we 
apply to all other things are inapplicable to financial affairs. The 
most noticeable thing about the Message is the allegation that 
silver coinage is the " ceaseless stream that threatens to overflow 
the land." This, we are informed, will produce a " severe con- 
traction of the currency," and also produce a disastrous " rise in 
prices." This absurd statement arises from supposing that mi- 
raculous and special laws preside over money. The President 
imagines that, unlike all other scales, the scales of finance are 
so wonderfully and strangely constructed that a weight placed in 
one side will make both sides go down at once. The President 
fancies, when the currency is contracted and thereby inevitably 
made more in demand, scarcer, and more valuable, that then 



APPENDIX. 



549 



people will give more of this enhanced money for a certain thing 
than before money rose in value. If this were so, a stoppage of 
silver coinage would raise prices. But the President tells us 
that prices will rise if silver coinage be not stopped. What a 
confusion of ideas ! 
The Message says : 

" The necessity for such an addition to the silver currency of the nation 
as is compelled by the silver-coinage act, is negatived by the fact that 
up to the present time only about fifty millions of the silver dollars so 
coined have actually found their way into circulation, leaving more than 
one hundred and sixty-five millions in the possession of the Government, 
the custody of which has entailed a considerable expense for the construc- 
tion of vaults for its deposit. Against this latter amount there are out- 
standing silver certificates amounting to about ninety-three millions of 
dollars." 

If the fact of silver lying in the Treasury be evidence that silver 
coinage should be stopped, then it follows that gold lying idle in 
the Treasury is evidence that gold coinage should be stopped. 

The Secretary of the Treasury says : 

" The assets of the Treasury on the ist of November, 1885, excluding 
fractional coin and other unavailable items, were as follows : 

Gold coin and bullion $251,359,349.29 

Less certificates outstanding 109,020,760.00 

$142,338,589.29 

Silver coin and bullion $167,657,878.45 

Less certificates outstanding 93,146,772.00 

$74,511,106.45." 

Thus it appears that the amount of idle gold dollars is largely 
in excess of the idle silver dollars, and, if the President's reason- 
ing be correct, gold coinage is unnecessary. 

The Message says : 

" A special effort has been made by the Secretary of the Treasury to 
increase the amount of our silver coin in circulation, but the fact that 
a large share of the limited amount thus put out has soon returned to 
the public Treasury in payment of duties, leads to the belief that the 
people do not now desire to keep it in hand." 

But, according to the foregoing statement of the Secretary, the 
people do not desire to keep gold in hand ; and therefore gold 
should no longer be coined. The simple fact is that the people 



550 



APPENDIX. 



generally prefer paper money to gold or silver; but this does 
not prove that either of those metals should be demonetized. 

The Message tells us that silver dollars are "depreciated.'* 
But the only evidence adduced in support of such an idea is the 
fact that their bullion value is less than that of gold. The en- 
hanced value of gold in consequence of an increased demand is 
not considered for a moment. 

The Message next states that European governments have de- 
monetized silver, and that " the views of these governments are in 
each instance supported by the weight of public opinion." 

But what is meant by "public opinion " in European countries .'- 
Is it not certain that those countries are governed by the priv- 
ileged and the rich ; and that the masses of the people are not 
represented ? 

The President then says : 

" The condition in which our Treasury may be placed by a persistence 
in our present course, is a matter of concern to every patriotic citizen 
who does not desire his Government to pay in silver such of its obliga- 
tions as should be paid in gold." 

As none of the Government bonds contain an agreement to pay 
them in gold, this is assuming that every man who wishes the 
bonds paid according to their tenor is not "patriotic." The Pres- 
ident evidently fancies that patriotism requires the robbery of tax- 
payers in order to pay bondholders differently from the agree- 
ment made when the money was loaned. 

We are next told : 

" We have now on hand all the silver dollars necessary to supply the 
present needs of the people. If the need of more is at any time apparent 
their coinage may be renewed." 

Who shall be the judge of the amount of dollars needed by the 
people ? Shall the amount of metallic money be regulated by the 
production of mines and the amount of metal in existence ; or, 
shall it be regulated by the caprice of the administration? 

On this point, Prof. W. S. Jevons, an economist of world-wide 
reputation, says : " It might seem natural that one most important 
point for discussion in an Essay on Money would be the quantity 
of money required by a nation. Nothing would seem more desir- 
able than to decide how much each person needs of paper, gold, 



APPENDIX. 



551 



silver or bronze currency, so that the Government might take care 
to provide sufficient for every one. 

" No one can tell how much currency a nation requires, and to 
attempt to regulate its quantity is the last thing which a statesman 
should do. We shall find that to ascertain how much money is 
needed by a nation is a problem involving many unknown quanti- 
ties, so that a sure solution can never be obtained." 

Mr. Cleveland, however, appears to think he could tell just 
how many silver dollars are needed in the United States. 

Scores of other authorities could be quoted to sustain the fore- 
going opinion of Prof. Jevons, but I will only cite the words of one 
other writer. " Gold and silver coins of known weight and fine- 
ness are admirably fitted to perform the functions of money. 
Costing labor and always in demand, they have a solid and per- 
manent value. Their purchasing power is not crippled when the 
Government chooses to make others like them. There is no 
motive on the part of any body or any power to multiply the 
national coins to the extent of depreciation. Inflation, there- 
fore, with depreciation and its attendant evils, is impossible. As 
much may be said of contraction. Should there be temporarily, 
a short supply of coin, an intenser demand would present sufficient 
inducements to augment the quantity. Bullion would be taken to 
the mint for coinage and importations stimulated. In this man- 
ner, the evil would be soon cured. Thus is the supply adjusted 
to the demand, and the accepted standard of value preserved by a 
mechanism which is self-regulating. Human beings, prompted by 
the love of gain, are instruments in a work too nearly connected 
with the great industrial concerns of a people to be committed to 
heads and hands less intelligent and energetic than those 
prompted and guided by self-interest. 

" The expression, ' The supply of money should be equal to the 
wants of trade,' is at least intelligible provided the money referred 
to be specie. It means that the business of a country should 
have its proportion, and no more, of the circulating medium of the 
world ; that unnatural scarcity should be met by greater abun- 
dance, and superabundance by greater scarcity ; that the volume 
should not be changed arbitrarily or capriciously; that any new 
demand growing out of an enlarged industry should be relieved 
by an ampler supply ; all for the purpose of preventing fluctua- 
tions in the standard of value, and of holding prices at their nor- 



552 APPENDIX. 

mal level. Every legitimate demand should be satisfied, but this 
will be done by virtue of the inevitable law which governs the 
movement of specie— a movement which may be embarrassed but 
cannot be helped by supervision or outside interference. Govern- 
ment, in this matter, as in some others, can do nothing but 
blunder. Its whole duty is discharged and its useful ability ex- 
hausted when it gives honest coins for all the bullion offered. It 
might as well attempt to control the tides as superintend the ebb- 
ing and flowing of the precious metals." 

When the foregoing was written it was fully endorsed by the 
same men who now tamper with the coinage and seek to have the 
amount of metallic money controlled arbitrarily by Congress or by 
the Secretary of the Treasury. Why has this change of sentiment 
occurred ? Simply because they had not then generally and fully 
grasped the idea that it was possible to tamper with the coinage 
in such way as to increase, both the value of money, and of bonds, 
and other evidences of indebtedness. They knew the people 
would not submit to raising the weight of gold and silver coins, and 
the fact that the same result could be reached by demonetizing 
one of the precious metals was not then, as now, generally compre- 
hended by the bankers and creditors. But as soon as they saw 
that the coinage could be tampered with, in their interest, they 
abandoned the doctrine that " Government should not interfere 
with the amount of coinage," and raised a hypocritical wail that 
" honesty " required legislative interference with the amount of 
metallic money. 

In so doing they abandoned the principles on which they have 
stood for generations. How long will it be before they regret 
advocacy of a doctrine so dangerous to themselves .'' For it logi- 
cally and inevitably follows, that if the legislature have a just 
right to tamper with the coinage and increase the value of a dollar, 
it has an equally good right to diminish the value of a dollar. 

The President next informs us that there " exists a lack of con- 
fidence among the people." 

We ask : Confidence in what ? Is it not perfectly certain that 
no one fears a rise of prices ? If the capitalists thought prices 
were soon to rise they would not hoard money, but invest in 
something which they expected to rise in value. The simple 
fact is that under our present financial policy, it is gold and not 
commodities which is rising: in value. Gold is now hoarded be- 



APPENDIX. 



553 



cause it is expected that the coinage of silver may be stopped and 
thus still further enhance its value. 

If the owners of gold could be fully convinced that the coinage 
of silver would never be stopped, what would they do ? It is cer- 
tain that then, as now% they would try to increase their wealth. 
As soon as they saw the source of an increased demand for gold 
dried up they would see an end to a rise in its value and would 
exchange gold for things whose price they expected would rise. 
In other words, they would invest in real estate, machinery, 
buildings and various other things. No longer hoarded, gold 
would be thrown on the market and offered for sale. It would 
consequently be practically plentier, — less demand would exist for 
it and its value would naturally fall. This would be evidenced 
by a rise of wages and prices of all kinds. Better times w^ould 
. then reign for the masses of the people. 

But, the root of the present controversy lies in this fact : viz.. 
When prices are falling and low, the times are better for the wealthy 
money lender than when wages and prices are high. Hence the 
selfish interests of that class prompt them to desire low prices and 
"hard times for the majority. Nothing is more absurd than to im- 
agine the selfish interest of a rich money lender as identical with 
that of the whole community. 

The Message concludes by stating, in substance, that the pres- 
ent depression of prices and business is due to silver coinage. 

If this were true, in nations which have stopped the coinage of 
silver prices would be higher than in this country ; such nations 
would be more prosperous than ourselves. But it is a notorious 
fact that low prices and business depression have seized different 
countries in the order in which they have demonetized silver. De- 
pression of business is greater in European countries, with gold 
as the sole standard, than in the United States with gold, silver 
and greenbacks as the legal tenders. This fact is universally con- 
ceded and not in the least degree explained by any theory ad- 
vanced by those who advocate our adoption of the monetary pol- 
icy of Europe. 

secretary's report. 

Let us next briefly examine the chief points in the Report of 
the Secretary of the Treasury. The entire Report is based upon 
the assumption that the value of money and the prices of com- 



554 



APPENDIX. 



modities cannot be affected by legislation. But, curiously enough, 
the Report begins with a suggestion that two of these uninfluen- 
tial laws be repealed : viz., 

" I. The act of Feb. 28, 1878, which has been construed as a permanent 
appropriation for perpetual Treasury purchases of at least $24,000,000 
worth of silver per annum, although from causes mostly foreign that 
metal is now of mutable and falling value, which must be manufactured 
into coins of unlimited legal tender and issued to the people of the United 
States as equivalents of our monetary unit. 

"2. The act of May 31, 1878, which indefinitely postponed fulfillment 
of the solemn pledge (March 18, 1869) not only of 'redemption,' but 
also of ' payment ' of all the obligations of the United States not bear- 
ing interest, legalized as $346,000,000 paper money of unlimited legal 
tender, and required the post-redemption issue and re-issue of these 
promises to pay dollars, equivalents of our monetary unit." 

If legislation have no effect, why change the laws ? 
• This repeal, the Secretary informs us, can be made " without 
raising the United States monetary unit of value to a costlier dol- 
lar." This statement is the logical result of the theory that 
no matter how much additional demand be made for gold its 
value remains unchanged. If the aforesaid statement of the Sec- 
retary be true, then all the silver and all the paper money in the 
world could at once be destroyed without making a gold dollar 
" a costlier dollar." If the doctrine of the Secretary be true, the 
discovery of a mine from which ten thousand millions of gold 
could be readily taken would not lower the value of gold. This 
would appear true, so long as we adopt the notion that the correct 
way to test the value of gold is to compare one gold dollar with 
another gold dollar. As one potato, at the same time and place, 
is always worth another potato of the same size and quality, the 
Secretary might as well say that potatoes have " an invariable 
value." 

Both the President and the Secretary speak of "compulsory 
coinage " with the evident intention of conveying the idea that 
the Government is under greater compulsion in regard to coining 
sih^er than in regard to coining gold. 

This is clearly an unfair mode of stating the actual facts of 
the case. The Government by law is under compulsion to coin 
all the gold that may be brought to the mints for that purpose. 
But the Government is not under compulsion to coin a single 



APPENDIX. cii 

ounce of silver brought to the mint by bullion owners. If the 
Government were under such compulsion, silver coinage would 
have been much larger than it has been. It is required that not 
less than two, nor more than four millions of silver per month be 
bought and coined by the Government. But the matter is so 
stated by the Secretary and President as to mislead many persons. 
The Report then states : 

"The history of the monetary unit shows that from 1792 to 1873 that 
unit was embodied by law in either metal. The arrangement is such as 
is now called bimetallic." 

This is true, but for obvious reasons the Secretary omits to 
state the important fact that the option of selecting the kind of 
metal in which obligations should be discharged has always rested 
with him vi\io paid money and not with him who received it. Dur- 
ing that time, all the United States bonds were authorized with 
reference in each bond to the legal coin in which the bond was 
to be paid. It is now pretended that the United States creditors 
have the option of directing how they shall be paid. But when 
these creditors originally bought the bonds they did not give the 
Government the right to say how payment should be made for 
said bonds. They paid for them in what was then the cheapest 
legal tender — greenbacks. 

The Report next says : 

" During the time when the 371.25 troy grains of fine silver continued 
to be a coin embodiment of the monetary unit, there was no appreciable 
fluctuation in its value as compared with the mass of commodities, ser- 
vices, and savings measured thereby. Slight variations in the gold coin, 
therefore, made solely for the purpose of retaining both metals in use, 
and for reaching a more perfect equivalence in order to retain both 
metals in use, are only confirmations added to proof in the uniformity 
(371.25) from 1792 to 1873. During the time when 23.22 grains of pure 
gold have been either a concurrent or the single coin embodiment of our 
monetary unit, there has been no demonstrable fluctuation in its value as 
compared with the mass of commodities, services, and savings measured 
thereby." 

This is only another way of stating that the prices of labor and 
commodities, stated in gold and silver, did not appreciably fluctu- 
ate from 1792 to 1873. But whoever will look at an old file of 
newspapers will find great fluctuations in the average scale of wages 
and prices during that period computed in gold and silver coins. 



556 



APPENDIX. 



Prof. Jevons has demonstrated that from 1809 to 1849, prices 
of commodities fell in the ratio of 245 to 100. In other words, an 
ounce of gold or silver bullion was worth nearly two and a half 
times as much in 1849 as in 1809. 

Every person of mature age knows from personal recollection 
that prices have undergone great fluctuations during said time, 
no matter whether stated in gold, silver or paper money. 

But as gold and silver during that time had substantially the 
same value, in order to state that gold has an " invariable value," 
it became necessary for the Secretary to claim that silver had 
also a fixed value up to 1873. Suppose for the sake of illustration, 
we assume that the Secretary be correct and that silver did actual- 
ly have a fixed value from 1792 to 1873. What has occurred to 
disturb this fixed value and make silver " depreciate and fluctuate " ? 
The Secretary tells us in his Report that the " annual change in 
the total amount of gold and silver in the world is a petty percent- 
age, — say I 33-100 per cent. — and is divided equally between 
gold and silver." Thus it is not even alleged that there has 
recently been any extraordinary production of silver. 

It is also certain that there has been no change in the physical 
qualities of silver, — they are now precisely what they were a thou- 
sand years ago. 

Only one change has taken place and that is the demonetization 
of silver. Previous to 1873, the majority of mankind imagined 
silver had " a fixed value " because they compared it simply with 
itself ; or what was practically the same thing, with its fellow legal 
tender, gold. But the moment the legal-tender quality was re- 
moved from silver and its value measured only by the value of 
gold, silver appeared to fluctuate, while gold, compared only with 
itself, appeared to stand still. 

If we test the value of silver by the true method of determining 
the value of any kind of money ; viz., the average scale of the 
prices of labor and commodities, we shall find that the so-called 
" depreciation " of silver has kept about an even pace with the 
fall in other prices. This shows that since 1873, the period during 
which the Secretary tells us silver has begun to " fluctuate," the 
real value of silver has changed but little. One thousand ounces 
of silver bullion will to-day, on the average, buy more property 
than one thousand ounces of silver would buy in 1873 when silver 
was " at par " with gold. 



APPENDIX. 



557 



The Secretary then speaks of " the impotence of any nation's 
legislation to affect prices." But, it is no compliment to the Secre- 
tary's intelligence, to assume that he does not know perfectly well 
that the legislation he asks for wiU lower prices, and place the 
control of the currency, and therefore the control of prices, more 
in the hands of bankers than at present. 

The Secretary makes a statement to the effect that, inasmuch as 
the greater portion of our foreign trade is with nations using gold, 
therefore we need a gold currency, so that our coins can be 
:shipped in payment of balances. 

Ignorant people suppose our coins are thus shipped. But the 
Secretary of the Treasury should know that foreign balances are 
paid with bullion and not with coin. Whether we have coin of 
any kind in circulation or not, bullion pays the balance. 

The Report lastly says : 

" The range of prices is lower to-day than since the discovery of gold 
in California. Man's inventions and industries are hammering down the 
prices of all the products of man's labor. If one New England town, by 
one week's labor, can shoe ail the feet in Cincinnati, Chicago, and St. 
Louis for a year, when a year's work was too little one decade ago, how 
shall not the price of shoes go down } Everywhere the effort is to ob- 
tain shelter, clothing, food, and the ornaments of these necessities of life 
at a smaller expense of mental energy and bodily toil. The history of in- 
ventions is the record of permanent reductions of the cost of getting 
man's necessities. This reduced cost makes possible the enlargement 
of the comforts of all, a higher and higher standard of life for the poor. 
How shall the reduced cost not appear in dropping prices ? But things 
on hand bought to sell fall while held. To the trading classes a fall of 
prices when comprised in too brief periods cannot but bring some measure 
of distress ; when continued for too long periods, cannot but entail a gen- 
eral depression of trade. But when it is neither sudden nor prolonged 
enough to throw large numbers out of employment, the great mass 
of working men and women find in lower prices almost unmixed good. 
Wages are always at once exchanged, with some deduction for saving, 
and if prices are lower the same wages buy more. Even where reduced 
prices necessitate reduced wages (and on the whole, even in Europe, 
the return to labor grows more and more) the wage-receiver gets the 
advantage of wages being slow to move, as he gets the disadvantage of 
their being the last to move when from a degradation of the unit of 
value, or its legal equivalent, prices measured by that unit going up, the 
same wages buy less. To keep the unit of value stable is the true limit 
of legislative control over prices.'^ 



558 



APPENDIX. 



As prices are an infallible index of the value of money, the 
admission that prices are now lower than since 1849 is an admis- 
sion that gold has risen over twenty-five per cent, in value since 
1873. It is also an admission, that if the holders of United 
States bonds were now paid in silver dollars, according to the 
tenor of said bonds, they would receive more actual value than 
they would have received in 1873, if they had then been paid in 
gold dollars. Said admission is also equivalent to saying that, 
since 1873, gold has fluctuated in value more than silver, since 
there has been a greater uniformity of prices for the past twenty- 
five years stated in silver than stated in gold. 

But the Secretary tries to make us think that said fall in prices 
has been caused by " man's inventions and industries " and not 
by a diminution of the amount of money in circulation. In so 
doing, he abandons the long and indisputably established princi- 
ple that prices are invariably affected by either increasing or di- 
minishing the amount of the circulating money in which those 
prices are stated ; no matter of what materials that money be made. 
If the Secretary be correct, the fact that a pair of boots, in Rich- 
mond, on January i, 1865, were worth three or four hundred 
dollars, did not show an increase in the currency which bought 
said boots, but indicated a want of " invention and industry." 

Prof. Rogers, the greatest living authority on wages and prices 
in England, tells us that from 1450 to 1877 the average scale of 
prices in England rose 1200 per cent, , — that is, they were, on the 
average, twelve times as high in 1877 as in 1450. 

In no period of English history have " man's inventions and 
industries " made greater progress than during the period in 
which this great rise of prices has occurred. 

If the theory of the Secretary were correct, said fact would be 
reversed ; — prices would have been on the average lower in 1877 
than in 1450. The plain fact, known to every student of history, 
is that the discovery of the gold and silver mines of America 
poured a vast amount of the precious metals into the channels of 
commerce and largely raised prices throughout the civilized world. 

The New York Tribune, a zealous supporter of the Secretary's 
policy, on Dec. 28, 1885, says : 

" It is often said that silver is worth as much as it was in 1870. In the 
sense in which that phrase is ordinarily used and meant to be under- 
stood, the statement is not true, and it is no defense of it to say that 



APPENDIX. 



559 



wheat, corn and other important products have declined since 1870 a 
little more than silver. They have declined in the main for reasons 
w^hich have nothing to do with the use or disuse of silver — because of 
cheaper transportation, for instance, and the use of improved machinery, 
and the accumulation of capital and the low rate of interest. 

From 1850 to 1870, transportation steadily grew "cheaper"; 
there was greater " use of improved machinery " ; a great " accu- 
mulation of capital " ; and a tendency to a " low rate of interest." 
During those twenty years, if the Secretary and Tribune be cor- 
rect in their theories, prices would have steadily fallen. But, 
every man of mature age knows perfectly well, from personal 
observation, that those years were characterized by a considerable 
rise in the average rate of prices. Furthermore, every intelli- 
gent man knows that the events which are above enumerated as 
causing lower prices were in as full operation before, as since 1870. 
Theories which are thus contradicted by facts may amuse some 
persons but they have no other utility. The average price of com- 
modities has fallen because, while the products of industry have 
increased in number and amount, the money in which the prices of 
those products are stated has relatively diminished in amount. 

The Secretary's language implies belief that prices follow a 
mysterious "cycle," and that the value of a dollar is beyond 
" legislative control." But there is no greater mystery about 
the rise or the fall of the value of a " dollar " than there is about 
the value of a bushel of wheat. A diminution of the number of 
bushels of wheat in a country tends to increase the value of each 
one of those bushels. An increase of bushels tends to make them 
cheaper. The value of " dollars," no matter of what material 
they be made, depends on precisely the same principle as the 
value of " bushels." 

Furthermore, we should remember that the value of a bushel 
of any kind of grain can be increased without diminishing the 
number of bushels of that grain in existence. Suppose the farm- 
ers of a certain country have raised a hundred million bushels of 
corn and a hundred million bushels of oats. If, in some way, 
the oats be destroyed, the corn is in greater demand to feed 
animals with and consequently is made more valuable. It is 
always the relative plenty or scarcity of a thing which lowers or 
raises its value. The value of gold and silver is governed by 
the same laws which regulate the value of corn and oats. Gold 



56o 



APPENDIX. 



was not diminished in actual amount by demonetizing silver. 
The fall of prices stated in gold indicates the extent to which 
it has been made relatively scarce by demonetizing silver. 

It is true that invention enables the same amount of labor to 
produce more wealth than previously, and that changes are thus 
wrought in the relative prices of different things. But such altera- 
tions do not affect the average scale of wages and prices. While 
the advance in science, art, and mechanical skill has greatly low- 
ered the prices of many things it has enormously raised the value 
of many others. For example, witness the changes in the value of 
real estate, timber, coal, stone, sand, water and many other things 
which had almost no price before invention brought them in de- 
mand by creating a new or an additional use for them. The true 
test of prices is found in a careful comparison of the prices of all 
things (including, of course, labor) bought and sold at one period 
of time, with the prices of all things bought and sold at another 
period. Such a test shows the amount of money in circulation the 
dominant cause of changes in the average scale of prices. 

Since 1873, "invention and industry" have been no greater than 
during the twelve years immediately before that time. But for 
the twelve years which have elapsed since 1873 prices have steadily 
fallen. And this fall is as noticeable as anywhere else in those 
commodities, in the production of which no marked invention has 
occurred. For instance, note the great fall in cotton ; pig iron, pork, 
wheat, cheese and other products of the soil. No increased 
" invention " has taken place in the mode of producing the great 
mass of valuable things whose price has fallen. 

The Secretary, like the majority of bankers, has a great affec- 
tion for "working men and women." He tells us that the fall 
in prices has been to those classes " almost unmixed good." 

Let the Secretary test this statement by actual contact with 
" working men and women." Let him first visit a few individuals 
who form part of the millions of farmers whom the enhanced value 
of gold has compelled to sell the products of their toil at very low 
prices while their taxes and debts were unchanged. Let him next 
talk with the laborers in mines, forges, and factories and ask : 
" Are you not better off now than in good times ? " 

If the Secretary be right in regard to the blessing of low prices 
and hard times to the laboring classes, why should he talk about 



APPENDIX. 



561 



" our present troubles " as he does ? If such be the case, we are 
not in " trouble." 

Is not the talk of all rich money lenders about the " blessing to 
the poor of low prices " a deceitful mockery ? Common observa- 
tion tells us that the wages of laborers are usually cut down more 
than the percentage of fall in the prices of the necessaries they 
buy. This must necessarily be so. When prices fall, money 
rises in value. The creditor classes then make gains and what 
they gain some ofie else must lose. If wages went down only to 
the extent that other prices fell, the wages receiving classes would 
not be compelled to bear any part of the losses which some per- 
sons must incur in order to increase the value of the creditor's 
bonds and mortgages. It is matter of common knowledge that 
what are called " hard times " usually bear with more severity on 
those who work for daily wages and on the farmers than on any 
other classes. . When market prices are falling, the retail dealers 
always endeavor to throw the consequent losses on their custom- 
ers. Thus the assumption of the Secretary, that the loss from 
falling prices is borne entirely by the trading classes is incorrect. 
Those who have a fixed annual salary, like the President and the 
Secretary, are better off in " hard times " than in " good times." 
And to all persons under similar circumstances, " hard times for 
the majority" means good times for them. 

What does the Secretary mean by saying that to " keep the unit 
of value stable is the true limit of legislative control over prices .'' " 
If he mean that the same specific things should always form the 
legal tender ; that coins should always be of the same weight, fine- 
ness and material ; then the act of 1873 which changed the specific 
things constituting the national legal tenders was an outrage 
which should at once be redressed by restoring the coinage to 
the previously established specific things as legal tenders ; to wit, 
23 22-100 grs. of gold or 371 1-4 grs. of silver, as one legal dollar 
at the option of the payer of said dollar. Both of said coins to 
have no coinage limit except the amount of gold or silver bullion 
brought by the people to the mints. 

If the Secretary mean, by the words " stable value," a unit of 
which either the weight or the materials have been, or should be, 
changed in order to keep its value stable, then he means that as 
gold has risen in value we should at once reduce the weight of the 

36 



562 APPENDIX. 

gold dollar for the purpose of having it of the same value it was 
when our Government bonds were first sold. 

If the Secretary intend to convey the idea that the gold dollar 
is of the same value now that it was when the silver dollar had free 
coinage, then he intends to convey an idea that is utterly false. 
He might as well say that the destruction of all the bituminous coal 
in the world would not raise the value of anthracite coal. When 
the silver dollar was demonetized the gold dollar was thereby 
placed under different conditions ; the amount of gold in the 
world was not thereby increased, but the use, and consequent 
demand for gold were largely increased. The relative amount of 
gold in the world was ditninished by demonetizing silver. 

Suppose the various nations which have demonetized silver had 
selected gold as the metal to be discarded. Would silver then have 
remained at the same value it had when gold was its fellow legal 
tender ? Not at all. The amount of silver would not be in- 
creased by such legislation but the demand for silver would be 
etiormously increased. Silver compared with itself would then be 
unchanged in value ; — it would remain at " par." But compared 
with gold and all other commodities, it would have risen in value 
just as gold now has. This fact is virtually conceded by both the 
President and Secretary ; otherwise all their talk about an " inter- 
national " arrangement for coinage is the sheerest nonsense. If 
legislation have no effect on the value of gold, then it necessarily 
follows that international legislation in reference to coinage could 
not have the slightest effect on the value of either gold or silver. 

If the theories of the President and Secretary be true, a unani- 
mous agreement of all the nations in the world to coin silver at a 
definite ratio to gold would not in the least change the relative 
demand for one or other of those metals ; and consequently 
would not alter their relative value. But the Secretary informs 
us that the " fixed value " which silver had prior to 1873 "was 
upset by Germany." If legislation have no effect on value how 
could German laws " upset " the value of silver ? Do not such 
contradictions show the falsity of the Secretary's theories .'' 

Artful sophistry may endeavor to conceal it, but the fact re- 
mains unaltered, that tampering with the coinage and currency is 
an insidious means of either raising or lowering prices. When 
prices are thus stealthily altered the crime is precisely the same 
as when theft is committed by lessening the weight or fineness 



APPENDIX. 



563 



of coins. How low could prices and wages be reduced by those 
now in control of the financial policy of this country and Europe ? 
Without changing the weight of a gold dollar, it is perfectly cer- 
tain, that if permitted by the people the currency could be so manip- 
ulated by legislation that the price of a barrel of good flour in 
New York City would be only one dollar, and all other prices 
correspondingly low. This would necessarily involve the concen- 
tration of wealth in few hands to an extent compared with which 
the present disparity would appear insignificant. 

All history tells a monotonous story in regard to wrong and 
oppression. Once fully begun, encroachments on popular rights 
have never ended by the voluntary acts of the spoliators. In all 
ages they have invariably continued until met by a force superior 
to their own. Human nature is unchanged. What always has 
been, will again occur. The only uncertain thing about the pres- 
ent situation is this : How much will they first endure ; how 
much time will pass, before the masses of the people discover the 
actual facts, realize how they have been, and are being deceived 
and wronged, and assert their superior power ? In the United 
States it is easy for them to quietly do so, by action at the ballot 
boxes. The needful thing is that a majority of voters should pos- 
sess a sufficiently clear knowledge of principles to enable them 
to correctly interpret unpleasant facts relating to the political and 
social organization of this country. 



INDEX. 



INTRODUCTORY. 

Natural laws are not only invariable 
but they apply impartially to all 
things, I. 

What political economy is, 2. 

A mistaken belief, 3. 

How economic laws should be con- 
sidered, 3. 

Mankind are governed by many 
emotions and thoughts, 4. 

Common mode of writing economic 
works, 5. 

Political economy is an imperfect 
science, 6. 

A confession, 8. 

Ignorance is the mother of credu- 
lity, 9. 

The plain truth, 11. 

Why mankind make such slow 
progress, 11. 

Original thought is not common, 13. 

Mankind prefer old to new things, 
14. 

Evils perpetuate themselves, 15. 

Need of elementary study, 16. 

Terrible fruits of false premises, 18. 

CHAPTER II. 

What is money ? Its functions ; 

very important that all should 

understand, 19. 
Prevalent ideas about money, 19. 
False dogmas by the million, 22. 
How the people came to be misled, 

23- 

CHAPTER III. 

Why we use money, 24. 
What a science is, 24. 
How to study money, 25. 
What capital is, 26. 



Distinction between wealth and 

capital, 27. 
No use for money when no wealth 

exists, 28. 
A colony without wealth, 29. 
Need of tools, 30. 
Value of a thing is dependent on 

circumstances, 31. 
The value of land, 32. 
Need of capital, 32. ' 
How commerce began, 33, 
Definition of trade, 35. 
How trade is often carried on, 35. 
What simple barter is, 36. 
Advantages of direct barter, 36. 
Mechanism of exchanging things 

by use of money, 37. 
Who are principals in a trade, 38. 
Simple barter is still in use, 40. 
How barter tends to produce fair 

bargains, 41. 
Bartering labor, 42. 
Making "bees," 44. 
Growth of classes, 45. 
What a snob is, 45. 
Barter often the best way to trade, 

45- 

Profits of middlemen, 46. 

Barter could be employed more 
than it is, 49. 

Best test of wages, 49. 

Facilities for barter should be in- 
creased, 50. 

Importance of citizens being ac- 
quainted, 52. 

Wealth of cities, 52. 

Facts in regard to middlemen, 53. 

Parallel railroads, 53. 

Increase of middlemen, 54. 

CHAPTER IV. 

Indirect barter, 55. 

Origin of commission merchants, 56. 

Origin of merchants, 57. 



565 



566 



INDEX. 



A merchant's profits are for infor- 
mation, 58. 

Fairs, 59. 

When indirect barter begins, 60. 

Foreign commerce is barter, 61. 

Effect of destruction of gold and 
silver, 62. 

CHAPTER V. 

Money, 63. 

Trade through a third person, 64. 

Trade through a third thing, 64. 

Ancient kinds of money, 64. 

The peculiar use of money, 65. 

Mechanism of trading through the 
medium of a third thing, 65. 

What commerce is and how it de- 
veloped, 67. 

Difference between barter and ex- 
change with money, 68. 

Definition of the word " money," 69. 

A common but false idea, 70. 

Some debts can only be paid with 
coin, 72. 

The same thing may have several 
definitions, ^i- 

Why barter is often impracticable, 

74- 
Origin of the use of money, "j^. 
Legal-tender laws, 77. 
Effect of a change in value of the 

legal tender, 78. 
Development of money, 80. . 
A poor old thing is preferred to a 

good new thing, 82. 
What we can reasonably expect, 84. 
Bankers and money, 85. 
An irresistible movement, 85. 

CHAPTER VI. 

Origin of prices, 87. 

Primitive mode of stating prices, 88. 

Need of comparing all things with 
a few things, 89. 

Money of account, 91. 

A price is always a mode of com- 
paring one thing with another, 93. 

A money price is always a numer- 
ical comparison, 94. 

Antiquity of numerical comparison, 

95- 
Fractional money, 95. 
Primitive mode of making change, 

97- 



Division of values one function of 
money, 99. 

Money of account, resumed, 100. 

How value is expressed, loi. 

What happens when specie pay- 
ments are suspended, 103. 

Money of account would survive 
the destruction of all other 
money, 104. 

False predictions, 105. 

The weight of coins is seldom con- 
sidered, 106. 

Rise and fall of prices, 107. 

CHAPTER VH. 

Effect of legislation on value, 1 10. 

What legislation is, 1 1 1. 

Power of legislation is limited, 

113- 

The laws of trade, 113. 

An absurd question, 114. 

Human capacity is limited, 1 15. 

Inconsistency of those who deny 
that legislation can create value, 
116. 

Historical example of the creation 
of value by legislation, 1 17. 

Evidences that a thing is valuable, 
119. 

Value of a man's services, 120, 

Legislation may change the value 
of a person's services, 121. 

Historical legislation which affect- 
ed values, 121. 

Effect of the aforesaid law, 125. 

What made the aforesaid law pos- 
sible, 125. 

A plea in defense of the money 
lenders, 126. 

Effect of other legislation on paper 
money, 126. 

Bankers' schemes, 127. 

National bank act, 128. 

Subterfuges, 130. 

Why national bank-notes have not 
been destroyed, 130. 

Attacks on the greenbacks, 131. 

The five-twenty bonds, 132. 

Difficulty of satisfying avarice, 133. 

A hypocritical pretense, 134. 

Proclivity of mankind to hypocrisy, 

134- 
Means employed to perpetrate a 
crime, 136. 



INDEX. 



567 



Why Horatio Seymour was de- 
feated, 137. 
National credit, 138. 
What experience teaches, 138. 
Effect of act of March 18, 1869, 

139- 
When legislation creates value, 

139- 

Other acts of repudiation and dis- 
grace, 140. 

What made the aforesaid wrongs 
possible, 142. 

Fruits of crime and folly, 143. 

Views of a so-called statesman, 144. 

Simple facts overthrow false theo- 
ries, 144. 

CHAPTER VIII. 

Value ; a clear understanding of its 

nature indispensable, 146. 
How to study value, 147. 
Location apparently affects value, 

148. 
Creation of value by transportation, 

149. 
Effect of time in creating value, 152. 
Difference between value and 

weight and measure, 152. 
Change of place not the real cause 

of changes in value, 153. 
Men change values by time, place, 

and mode of sale, 154. 
A merchant's success, 155. 
The essence of value, 156. 
Intrinsic value, 156. 
Changes in value in consequence of 

changes in circumstances, 157. 
The result which creates value, 159. 
Unusual values, 160. 
Value of water, 160. 
Changes of value are always 

wrought by the same law, 161. 
How value is diminished, 162. 
How value is increased, 163. 
What gives stability to values, 164. 
Common idea of the cause of value, 

164. 
Why land has risen in value, 165. 
Why personal property changes in 

value, 165. 
Effect of law on the value of gold 

and silver, 166. 
Things do ngt possess two values, 

167. 



Exchangeable value, 168. 

Final analysis of the nature of 
value, 170. 

Different amounts of value created 
by the same amount of labor, 171. 

Why labor does not always create 
wealth, 172. 

How we state value, 174. 

Distinction between value and in- 
herent qualities, 177. 

Value not an intrinsic quality, 178. 

Legislation has no effect on intrin- 
sic qualities, 179. 

A prolific error, 180. 

What is necessary to the existence 
of value, 180. 

Value is always relative, 181. 

Only one way to learn the nature 
of value, 183. 

False theories in regard to land, 
184. 

CHAPTER IX. 

The silver question • it compre- 
hends many things, 187. 

Historical sketch of the silver dol- 
lar, 188. 

Acts of 1834 and 1837, 190. 

Relative value of silver and gold 
dollars, 191. 

Option of payment by either gold 
or silver, 191. 

Tendency of commerce, 192. 

Established right of both creditors 
and debtors, 193. 

Silver coinage, 194. 

Effect of demonetizing silver, 194. 

Contagiousness of vice, 195. 

False doctrines framed into law, 
196. 

Fundamental facts about gold and 
silver, 197. 

Gold and silver production, 198. 

World's production, estimated in 
pounds for twenty-year periods, 
198. 

World's production of precious 
metals, estimated in dollars for 
different periods, 199. 

World's production of gold and 
silver for 383 years, estimated in 
dollars, for different periods of 
time, 200. 

Attempt to demonetize gold, 202. 



568 



INDEX. 



Present consumption of gold in the 
arts, 203. 

Origin of the war on silver, 203. 

An old subterfuge, 205. 

Effect of legislation on the value of 
a dollar, 206. 

Value of all things dependent on 
the same law, 207. 

An example of legislative theft, 
208. 

A talk with a clergyman, 209. 

One purpose under various pre- 
tenses, 210. 

A doctrine dangerous to creditors, 
211. 

Ought the silver dollar to be made 
heavier? 212. 

Danger of robbing debtors, 213. 

Debt not disreputable, 213. 

The true doctrine, 214. 

Nothing is more detestable than 
hypocrisy, 214. 

The cry for honesty, 215. 

Groundless charges against silver, 
217. 

Why silver does not circulate, 217. 

Superiority of paper money, 218. 

The essential allegation in favor of 
gold, 221. 

Has gold a fixed value? 222. 

The bullion report, 222. 

Facts which overthrow the com- 
mon theory in regard to gold, 
224. 

Origin of a belief in the fixed value 
of gold, 224. 

By comparison with things other 
than itself is the only way in 
which we can ascertain and state 
any of the qualities of any object 
or thing, 226. 

All ideas are relative, 227. 

Need of comparing one thing with 
something beside itself, 228. 

Value should be tested as all other 
things are, 229. 

Logical results of comparing gold 
only with gold, 230. 

Result of unlimited coinage of sil- 
ver, 231. 

/Correct mode of stating the, value 
of gold and silver, 232. 

What a price is, 233. 

Money changes in price like other 
things, 234. 



How to test the price of money^ 

234- 
The price of gold, 235. 
Correct test of the rate of interest, 

236. 
Public debts and taxes, 237. 
An example of benevolence, 237. 
The true explanation, 238. 
What has changed the value of 

gold, 238. 
America bearing down the prices 

of American goods, 239. 
Effect of lowering prices in Eng- 
land, 239. 
The delusion that gold prices 

would not fall, 240. 
Effect of m.aking a metal legal 

tender, 241. 
Has silver depreciated in value?' 

243- 

How to test the value of silver,. 
245. 

Table of relative prices, 250, 251. 

Another comparison of prices, 253. 

Average and comparative prices of 
the principal domestic commod- 
ities exported from the United 
States from declared values at 
time of export, in gold, 254, 255. 

Ought an equality to be maintained 
between the value of the gold 
and the silver dollar, 256. 

Statements of the New York Tri- 
bune, 256. 

Silver more stable in value than 
gold, 257. 

Stability of prices is the practical 
result of a stable currency, 259. 

The 125-cent dollar, 260. 

Labor, a test of value, 260. 

Silver has risen in value, 261. 

Why silver has not fallen in value, 
261. 

Silver has always fluctuated in 
value, 263. 

Why England has a gold currency, 
264. 

Should we make times harder in 
Europe ? 265. 

Are payments in silver honest ? 
265. 

Written contracts more reliable 
than vague understandings, 267. 

A man cannot lose what he never 
owned, 268. 



INDEX. 



569 



Differences in relative value of gold 

and silver, 268. 
A suggestion for consideration, 

269. 
Result of entire demonetization of 

silver, 271. 
The idea of coercing England, 271. 
Ought prices to be depressed by 

legislation ? 272. 
The best kind of money, 273. 
Stable money best for the masses, 

274. 
A stable currency best for debtors, 

275. 
Why different classes have differ- 
ent ideas, 275, 
A notorious fact, 276. 
A letter from an " economist," 276. 

CHAPTER X. 

Is money capital ? 280. 

Nature of capital, 280. 

Similarity between money and 
blood, 281. 

Money helps production without 
forming part of products, 281. 

No kind of capital produces with- 
out labor, 282. 

Many kinds of capital have special 
functions, 282. 

All hoarded things are useless 
when hoarded, 283. 

A useless thing is not capital, 283. 

When money is used, 284. 

The true test -of money, 285. 

Control of money is control of la- 
bor, 285. 

How money maybe controlled, 286. 

Who should control the amount of 
money, 287. 

The true doctrine, 288. 

Jeffersonian democracy, 289. 

A conservative measure, 290. 

CHAPTER XI. 

Effect of changes in the amount of 

- money, 291. 

What a dollar is, 292. 

Why prices fall to such an extent 

when the currency is contracted, 

294. 
How we state the value of a dollar, 

295. 



Effect of habit on ideas of the value 

of a dollar, 296. 
Dollars and bushels are governed 

alike, 297. [298. 

How monopoly can change prices. 
Monopoly can change the value of 

a dollar, 298. 
Monopolies in California, 299. 
Money kings wish to corner money, 

299. 
Creditors can be robbed by inflat- 
ing the currency, 300, 
History of inflations, 300. 
Paper money is not helped by what 

is " back of it," 301. 
Inflation is possible without issuing 

paper money, 302. 
Paper money inflation a pretext for 

crime, 302. 
Not a fancy sketch, 304. 
Sudden changes in the currency 

paralyze business, 304. 
Why money is hoarded when prices 

are falling, 305. 
The true test of the cheapness of 

money, 305. 
Difference between temporary pos- 
session of money and ownership 

of it, 305. 
A mistake in diagnosis, 307. 
A typical writer, 308. 
Lack of confidence in prices is the 

reason men hoard money, 310. 
Effect of slow changes in the 

amount of money, 310. 
What we should seek, 312. 

CHAPTER XII. 

Alleged causes of hard times : The 
real causes are not usually as- 
signed, 313. 

Actions are more trustworthy than 
words, 314. 

No lack of confidence in silver dol- 
lars, 314. 

The confidence cry, 315. 

The bankrupt law did not make 
hard times, 317. 

Overproduction, 317. 

What production is, 318. 

Tendency of poverty, 319. 

Tramps, 320. 

Capacity to labor is a form of prop- 
erty, 321. 



570 



INDEX. 



The farmers and overproduction, 
321. 

Who are benefited by falling prices ? 
322. 

London and New York are the 
chief authors of the cry " over- 
production," 322. 

A temporary cure of " overproduc- 
tion," 323. 

Great changes in the amount of 
money in circulation destroy 
wealth, 324. 

When a thing has the greatest 
value, 324. 

What each person should possess, 

325. , , 

An example of destruction of value, 

325- 
Report of an embassy from Chma, 

327. 

CHAPTER XIII. 

Prices : They are always an ap- 
praisal of two things and a com- 
parison of one with the other, 333. 

What hard pan is, 334. 

13th-century prices, 334. 

A wedding in 1528, 334. 

Causes of fluctuations in prices, 335. 

Natural remedies, 337. 

Discounting the future, 338. 

Dangers of debt under the present 
monetary system, 339. 

Power of combined money capital, 

341- 
Irregularity of prices, 342. 
" Why silver falls," 343. 
Why falling prices throw workmen 

out of employment, 346. 

CHAPTER XIV. 

Specie payments, 348. 

The essential condition requisite to 

give value to paper money, 349. 
Specie payments, 349. 
Chief objection to specie payments, 

35°- 

How banks of issue raise and lower 
prices, 351. 

Essential feature of specie pay- 
ments, 352. 

How bankers evade their promises, 
352. 



The chief evil of specie payments, 

353- 

What occurred in 1857, 354. 

What experience has shown, 355. 

Legitimate banking, 355. 

National banks have special priv- 
ileges, 356. 

National banks are unfair monopo- 
lies, 357. 

The flow of coin, 358. 

Results of draining away money, 
360. 

A universal natural law, 362. 

What we should attempt, 363, 

The end toward which we are trav- 
eling, 363. 

CHAPTER XV. 

Franchises, 365. 

What a patent is, 365. 

Patents may be used to plunder 

the community, 366. 
What a franchise is, 366. 
What a railroad franchise is, 367. 
Watered stock, 368. 

CHAPTER XVL 

Interest of money, 370. 
The rate of interest is too high, 370. 
Why men pay any interest, 371. 
Human nature is unchanged, 372, 
Capital is necessary to existence, 

373- 
Free interest, 374. 
The difference between the rich 

and poor, 376. 
Different rates of interest, 376. 
Note, 377. 

CHAPTER XVII. 

The relations of capital and labor, 

382. 
Need of more capital than before 

expensive machines were used, 

383. 
Mistaken ideas about freedom of 

trade, 384. 
Patent laws cause an inequitable 

distribution of wealth, 384. 
Nature of the antagonism between 

capital and labor, 385. 
Different interests produce different 

conduct, 388. 



INDEX. 



571 



Why laws were created, 388. 
Why laws should continually 

change, 389. 
Contention between labor and cap- 
ital should be settled by law, 390. 
Origin of law, 391. 
Further progress is necessary, 391, 
Ought every man be allowed to do 

as he pleases, 392. 
A dangerous doctrine for the rich 

to preach, 394. 
What should be, 395. 
Rise of rents, 396. 
Hours of labor, 397. 
Comparison with a hundred years 

ago, 398. 
Is equity being done ? 400. 
Free trade is possible only when 

both parties have liberty of 

choice, 401. 
How workmen may rob employers, 

402. 
When free trade occurs, 402. 
What a good bargain is, 403. 
Laws are outgrowths of human 

necessity, 403. 
Siege of Paris, 404. 
Whert laws need revision, 405. 
Test of the wisdom of a law, 405. 

CHAPTER XVIII. 

Remedies for social conflicts, 407. 

Legislation should foster equality 
of wealth, 408. 

Measures should be general in pref- 
erence to special, 408. 

Potency of money, 409. 

Evils of waste, 410. 

Foolish and wasteful brutality, 410. 

Bad modes of building, 411. 

Many kinds of waste, 411. 

Taxation, 413. 

How taxes should be levied, 413. 

What a tariff is, 415. 

Taxation should always be laid 
with a twofold purpose, 415. 

Advantages of indirect taxation, 

417- 
Corporations, 417. 
One of the main roots of the labor 

question, 418. 
Ownership of whatever performs 

labor is ownership of labor, 419. 
A tish-hookTTiachine, 420. 



A man should control his means of 

subsistence, 421. 

Need of a large amount of capital, 
422. 

Inventions should not be made 
means of oppression, 424. 

How inventions are made, 424. 

All should be benefited by discov- 
eries and inventions, 425. 

Growth of inequality, 425. 

What should be done, 426, 

CHAPTER XIX. 

Socialism, 428. 

Horror of socialism, 429. 

What socialism is, 429. 

A socialistic post-office, 430. 

Socialistic schools, 431. 

Socialistic libraries and parks, 432. 

Socialistic water and fire-engines, 

432. 
Socialistic money, 433. 
Socialism at West Point, 433. 
Socialistic enterprises, 434. 
Advantages of socialism,. 435. 
Should socialism be extended ? 437. 
Socialism does not favor laziness, 

and unthrift, 437. 
How to help the poor, 438. 
Ungrateful snobs, 438. 
Future probabilities, 439. 
Causes of discontent, 439. 
Why some are richer than others, 

440. 
What shall we do ? 442. 
Lessons of experience, 443, 
"With M^hat measure ye mete, it 

shall be measured to you again," 

444. 
Need of hastening slowly, 444. 
Need of changing our patent lavi's, 

445- 
No cheap telephones before the 

year 1900, 446. 
Defects in our social system, 447. 
Folly of violence, 448. 
The true course, 448. 

CHAPTER XX. 

Is it a crime to own land ? 452. 
Let us think for ourselves, 454. 
From whence does land derive 
value ? 455. 



5/2 



INDEX. 



Land has no intrinsic value, 456. 

Value of New York land, 457. 

The value of land depends upon 
conditions, 458. 

The value of a certain piece of land 
is not identical with that of the 
work performed thereon, 459. 

Rights in property, 462. 

Why possession of a certain piece 
of land is desired, 462. 

Why absolute ownership of per- 
sonal property is desired, 464. 

Why absolute ownership of real 
estate is desired, 465. 

If the present owners of land re- 
tained its possession as tenants, 
how State ownership, without 
compensation, would produce in- 
justice, 467. 

Private ownership of things, 470. 

Rise of land in value, 472. 

Some facts concerning real estate, 

474- 
How great fortunes are usually 

made, 477. 
Has a person a right to inherit 

land ? 479. 
Aversion to land ownership, 480. 
How shall choice of lands be 

made ? 48 1 . 
An' impracticable scheme, 483. 
The true principles of taxation, 

484. 
Folly of invariable taxes, 486. 
Land titles, 487. 
Preservation of liberty, 488. 

CHAPTER XXL 

How shall we create a stable cur- 
rency ? 490. 

Stability of value possible only 
when conditions are stable, 491. 

Money is not strictly a measure of 
value, 491. 

Difference between money and 
other standards, 494. 

Some relative facts, 495. 

Effect of paper money, 496. 

Effect of hoarding gold, 497. 

Why prices change, 498. 

Changes in the number of stand- 
ards, 499. 

Silver and gold are governed by 
the same natural law, 500. 



Duty of Congress, 501. 
Importance of the dollar having a 

uniform value, 501, 
The central question, 503. 
Fruit of a false premise, 503. 
Money must be adapted to public 

intelligence, 504. 
Financial measures suggested for 

consideration and amendment. 

The proper inscription, 506. 
A perfect currency, 509. 
Successful use of paper money re- 
quires intelligence, 510. 
What will ultimately occur, 511. 
Notes, 512. 

CHAPTER XXII. 

Ought the United States to maintain 
the gold and the silver dollar 
at an equality of value ? 5 1 5. 

Folly of blindly imitating other 
nations, 516. 

What we have actually done, 517. 

What we should now do, 518. 

How foreign commerce is con- 
ducted, 518. 

Foreign trade is a barter of one 
thing for another, 520. 

The incentive of trade, 521. 

Why men engage in foreign com- 
merce, 522. 

Use of bills of exchange, 523. 

How England trades, 524. 

What wealth is, 525. 

Would it not be an advantage to 
have money similar to the na- 
tions with whom our trade is 
chiefly conducted ? 526. 

What effect would unlimited coin- 
age of silver produce ? 527. 

Silver bullion will never be easily 
obtained, 528. 

The end which laws should seek, 
529. 

The par-value delusion, 530. 

Effect of limited coinage, 531. 

Artificial value of coins, 533. 

Hard pan, 533. 

Gold premium, 534. 

True test of value, 535. 

How evils can be averted, 536. 

Social problems will always be be- 
fore mankind, 536. 



INDEX. 



573 



What inflation can do, 537. 
Confederate money, 537. 
A cotton basis for money, 538, 
Why goods are not sold when ac- 
tive inflation is progressing, 540. 
How to prevent inflation 542. 
Study of social topics, 542. 



APPENDIX. 

A review of the financial portion 
of the first message of President 
Cleveland and the accompany- 
ing report of the Secretary of the 
Treasury, 547. 




Lici-iMh L N RESS 



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